Question 1

When goods are returned that relate to a prior cash sale,

Accepted Answer

A) the Sales Returns and Allowances account should not be used. 
B) the cash account will be credited. 
C) Sales Returns and Allowances will be credited. 
D) Accounts Receivable will be credited. 
A) the Sales Returns and Allowances account should not be used. 
B) the cash account will be credited. 
C) Sales Returns and Allowances will be credited. 
D) Accounts Receivable will be credited.

Question 2

The collection of a ¥7,000 account after the 2 percent discount period will result in a

Accepted Answer

A) debit to Cash for ¥6,860. 
B) credit to Accounts Receivable for ¥7,000. 
C) credit to Cash for ¥7,000. 
D) debit to Sales Discounts for ¥140. 
A) debit to Cash for ¥6,860. 
B) credit to Accounts Receivable for ¥7,000. 
C) credit to Cash for ¥7,000. 
D) debit to Sales Discounts for ¥140.

Question 3

When goods are returned, the seller reduces the account receivable and increases the merchandise inventory accounts reported on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 4

Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.

Accepted Answer

A) True 
 B)False

Question 5

193
Rhodes Company provides this information for the month of November, 2011: sales on credit $150,000; cash sales $60,000; sales discounts $2,000; and sales returns and allowances $8,000.Prepare the sales revenues section of the income statement based on this information.

Accepted Answer

The answer of 193
Rhodes Company provides this information for the...

Question 6

Financial information is presented below:   Gross profit would be

Accepted Answer

A) €105,000. 
B) €28,000. 
C) €73,000. 
D) €150,000. 
A) €105,000. 
B) €28,000. 
C) €73,000. 
D) €150,000.

Question 7

Financial information is presented below:   The gross profit rate would be

Accepted Answer

A) .700. 
B) .187. 
C) .300. 
D) .487. 
A) .700. 
B) .187. 
C) .300. 
D) .487.

Question 8

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of

Accepted Answer

A) sales. 
B) merchandise inventory. 
C) sales discounts. 
D) freight-out. 
A) sales. 
B) merchandise inventory. 
C) sales discounts. 
D) freight-out.

Question 9

A company's unadjusted balance in Merchandise Inventory will usually not agree with the actual amount of inventory on hand at year-end.

Accepted Answer

A) True 
 B)False

Question 10

The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.

Accepted Answer

A) True 
 B)False

Question 11

In a perpetual inventory system, the Cost of Goods Sold account is used

Accepted Answer

A) only when a cash sale of merchandise occurs. 
B) only when a credit sale of merchandise occurs. 
C) only when a sale of merchandise occurs. 
D) whenever there is a sale of merchandise or a return of merchandise sold. 
A) only when a cash sale of merchandise occurs. 
B) only when a credit sale of merchandise occurs. 
C) only when a sale of merchandise occurs. 
D) whenever there is a sale of merchandise or a return of merchandise sold.

Question 12

Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S.GAAP?

Accepted Answer

A) IFRS allows both the perpetual and periodic systems, but U.S GAAP permits only the perpetual system. 
B) IFRS requires a single-step income statement, but U.S.GAAP allows either the single-step or the multiple-step income statement. 
C) U.S.GAAP allows operating expenses to be reported by either function or nature, IFRS requires reporting by function. 
D) IFRS requires 2 years of income statements, U.S.GAAP requires 3 years of income statements. 
A) IFRS allows both the perpetual and periodic systems, but U.S GAAP permits only the perpetual system. 
B) IFRS requires a single-step income statement, but U.S.GAAP allows either the single-step or the multiple-step income statement. 
C) U.S.GAAP allows operating expenses to be reported by either function or nature, IFRS requires reporting by function. 
D) IFRS requires 2 years of income statements, U.S.GAAP requires 3 years of income statements.

Question 13

After gross profit is calculated, operating expenses are deducted to determine

Accepted Answer

A) gross margin. 
B) net income. 
C) gross profit on sales. 
D) net margin. 
A) gross margin. 
B) net income. 
C) gross profit on sales. 
D) net margin.

Question 14

International Financial Reporting Standards allow different presentation formats for operating expenditures including by magnitude.

Accepted Answer

A) True 
 B)False

Question 15

On a classified statement of financial position, merchandise inventory is classified as

Accepted Answer

A) an intangible asset. 
B) property, plant, and equipment. 
C) a current asset. 
D) a long-term investment. 
A) an intangible asset. 
B) property, plant, and equipment. 
C) a current asset. 
D) a long-term investment.

Question 16

Under International Financial Reporting standards (IFRS) use of a worksheet by a merchandising company is strictly optional.

Accepted Answer

A) True 
 B)False

Question 17

A merchandising company using a perpetual system will make

Accepted Answer

A) the same number of adjusting entries as a service company does. 
B) one more adjusting entry than a service company does. 
C) one less adjusting entry than a service company does. 
D) different types of adjusting entries compared to a service company. 
A) the same number of adjusting entries as a service company does. 
B) one more adjusting entry than a service company does. 
C) one less adjusting entry than a service company does. 
D) different types of adjusting entries compared to a service company.

Question 18

IFRS requires 3 years of income statements, U.S.GAAP requires 2 years of income statements.

Accepted Answer

A) True 
 B)False

Question 19

A company shows the following balances:   What is the gross profit rate?

Accepted Answer

A) 56% 
B) 70% 
C) 44% 
D) 30% 
A) 56% 
B) 70% 
C) 44% 
D) 30%

Question 20

Merchandise inventory is reported as a long-term asset on the statement of financial position.

Accepted Answer

A) True 
 B)False

When goods are returned that relate to a prior cash sale,

The collection of a ¥7,000 account after the 2 percent discount period will result in a

When goods are returned, the seller reduces the account receivable and increases the merchandise inventory accounts reported on the statement of financial position.

Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.

193 Rhodes Company provides this information for the month of November, 2011: sales on credit $150,000; cash sales $60,000; sales discounts $2,000; and sales returns and allowances $8,000.Prepare the sales revenues section of the income statement based on this information.

Financial information is presented below: Gross profit would be

Financial information is presented below: The gross profit rate would be

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of

A company's unadjusted balance in Merchandise Inventory will usually not agree with the actual amount of inventory on hand at year-end.

The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.

In a perpetual inventory system, the Cost of Goods Sold account is used

Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S.GAAP?

After gross profit is calculated, operating expenses are deducted to determine

International Financial Reporting Standards allow different presentation formats for operating expenditures including by magnitude.

On a classified statement of financial position, merchandise inventory is classified as

Under International Financial Reporting standards (IFRS) use of a worksheet by a merchandising company is strictly optional.

A merchandising company using a perpetual system will make

IFRS requires 3 years of income statements, U.S.GAAP requires 2 years of income statements.

A company shows the following balances: What is the gross profit rate?

Merchandise inventory is reported as a long-term asset on the statement of financial position.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters

Exam 5: Accounting for Merchandising Operations

When goods are returned that relate to a prior cash sale,

The collection of a ¥7,000 account after the 2 percent discount period will result in a

When goods are returned, the seller reduces the account receivable and increases the merchandise inventory accounts reported on the statement of financial position.

Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.

193 Rhodes Company provides this information for the month of November, 2011: sales on credit $150,000; cash sales $60,000; sales discounts $2,000; and sales returns and allowances $8,000.Prepare the sales revenues section of the income statement based on this information.

Financial information is presented below: Gross profit would be

Financial information is presented below: The gross profit rate would be

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of

A company's unadjusted balance in Merchandise Inventory will usually not agree with the actual amount of inventory on hand at year-end.

The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.

In a perpetual inventory system, the Cost of Goods Sold account is used

Which of the following statements is true regarding International Financial Reporting Standards (IFRS) and U.S.GAAP?

After gross profit is calculated, operating expenses are deducted to determine

International Financial Reporting Standards allow different presentation formats for operating expenditures including by magnitude.

On a classified statement of financial position, merchandise inventory is classified as

Under International Financial Reporting standards (IFRS) use of a worksheet by a merchandising company is strictly optional.

A merchandising company using a perpetual system will make

IFRS requires 3 years of income statements, U.S.GAAP requires 2 years of income statements.

A company shows the following balances: What is the gross profit rate?

Merchandise inventory is reported as a long-term asset on the statement of financial position.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters