Exam 5: Accounting for Merchandising Operations

During 2011, Yoder Enterprises generated revenues of $90,000.The company's expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000. Yoder's gross profit is

A credit sale of ₤1,600 is made on April 25, terms 2/10, n/30, on which a return of ₤100 is granted on April 28.What amount is received as payment in full on May 4?

The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be

Sales revenues are usually considered earned when

Merchandise inventory is classified as a current asset in a classified statement of financial position.

All of the following items would be reported as other income and expense except

The Merchandise Inventory account is used in each of the following except the entry to record

Which of the following accounts has a normal credit balance?

Net income from operations is gross profit less

Computers For You is a retailer specializing in selling computers and related equipment.During 2011, Computers For You sells $200,000 of merchandise to Sandcastles, Inc.Computers For You incurs $24,000 of freight costs associated with these sales.Which of the following is true regarding how this $24,000 is treated on the financial statements?

A merchandising company using a perpetual system may record an adjusting entry by

Computers For You is a retailer specializing in selling computers and related equipment.Which of the following would not be reported in the merchandise inventory account reported on the statement of the financial position for Computers For You at December 31, 2011?

194 During October, 2011, Carol's Catering Company generated revenues of $13,000.Sales discounts totaled $200 for the month.Expenses were as follows: Cost of goods sold of $7,000 and operating expenses of $2,000. Calculate (1) gross profit and (2) income from operations for the month.

Gross profit represents the merchandising profit of a company.

Tony's Market recorded the following events involving a recent purchase of merchandise: As a result of these events, the company's merchandise inventory

During the year, Carla's Pet Shop's merchandise inventory decreased by $30,000.If the company's cost of goods sold for the year was $450,000, purchases must have been

190 Richter Company sells merchandise on account for $2,000 to Lynch Company with credit terms of 3/10, n/60.Lynch Company returns $200 of merchandise that was damaged, along with a check to settle the account within the discount period.What entry does Richter Company make upon receipt of the check and the damaged merchandise?

Closing entries impact the income statement but do not have an impact on the statement of financial position.

Freight-in is an account that is subtracted from the Purchases account to arrive at cost of goods purchased.

At the beginning of the year, Meng Company had an inventory of ¥400,000.During the year, the company purchased goods costing ¥1,600,000.If Meng Company reported ending inventory of ¥600,000 and sales of ¥2,000,000, the company's cost of goods sold and gross profit rate must be