Question 1

Financial information is presented below:   Gross profit would be

Accepted Answer

A) €154,000. 
B) €140,000. 
C) €128,000. 
D) €166,000. 
A) €154,000. 
B) €140,000. 
C) €128,000. 
D) €166,000.

Question 2

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.

Accepted Answer

A) True 
 B)False

Question 3

Cartier Company purchased inventory from Pissaro Company.The shipping costs were $400 and the terms of the shipment were FOB shipping point.Cartier would have the following entry regarding the shipping charges:

Accepted Answer

A)  There is no entry on Cartier's books for this transaction. 
B)   
C)   
D)   
A)  There is no entry on Cartier's books for this transaction. 
B)   
C)   
D)

Question 4

Which of the following would not be considered a merchandising company?

Accepted Answer

A) Retailer 
B) Wholesaler 
C) Service firm 
D) Dot Com firm 
A) Retailer 
B) Wholesaler 
C) Service firm 
D) Dot Com firm

Question 5

Under International Financial Reporting Standards (IFRS) operating expenses may be presented by nature or by function.

Accepted Answer

A) True 
 B)False

Question 6

During August, 2011, Joe's Supply Store generated revenues of $60,000.The company's expenses were as follows: cost of goods sold of $24,000 and operating expenses of $4,000.The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000. Joe's income from operations for the month of August, 2011 is

Accepted Answer

A) $60,000. 
B) $39,000. 
C) $37,000. 
D) $32,000. 
A) $60,000. 
B) $39,000. 
C) $37,000. 
D) $32,000.

Question 7

Touch Tronix, Inc.sells component parts to Advanced Communications, Inc.a cell phone manufacturer.On December 10, 2011, Touch Tronix, Inc.sold €680,000 of goods to Advanced Communications, Inc.on account for €880,000.Terms of the sale were 2/10, net 30.Advanced Communications, Inc.paid €13,000 in freight charges.On December 13, 2011, Advanced Communications, Inc.returned 5% of the goods due to inferior quality.On December 18, 2011, Advanced Communications, Inc.paid the account in full.Advanced Communications, Inc.uses a perpetual inventory system.If Advanced Communications, Inc.has not yet sold any of these goods, what is the ending balance in the inventory account after the payment is made?

Accepted Answer

A) €0 
B) €646,080. 
C) €832,280. 
D) €865,720. 
A) €0 
B) €646,080. 
C) €832,280. 
D) €865,720.

Question 8

Birk Company sells merchandise on account for $3,000 to Kiner Company with credit terms of 2/10, n/30.Kiner Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period.What is the amount of the check?

Accepted Answer

A) $2,940 
B) $2,952 
C) $2,400 
D) $2,352 
A) $2,940 
B) $2,952 
C) $2,400 
D) $2,352

Question 9

In a worksheet for a merchandising company, Merchandise Inventory would appear in the

Accepted Answer

A) trial balance and adjusted trial balance columns only. 
B) trial balance and statement of financial position columns only. 
C) trial balance, adjusted trial balance, and statement of financial position columns. 
D) trial balance, adjusted trial balance, and income statement columns. 
A) trial balance and adjusted trial balance columns only. 
B) trial balance and statement of financial position columns only. 
C) trial balance, adjusted trial balance, and statement of financial position columns. 
D) trial balance, adjusted trial balance, and income statement columns.

Question 10

Detailed records of the cost of each inventory purchase and sale are not maintained under a

Accepted Answer

A) perpetual inventory system. 
B) periodic inventory system. 
C) double entry accounting system. 
D) single entry accounting system. 
A) perpetual inventory system. 
B) periodic inventory system. 
C) double entry accounting system. 
D) single entry accounting system.

Question 11

Logan Company made a purchase of merchandise on credit from Claude Corporation on August 3, for $3,000, terms 2/10, n/45.On August 10, Logan makes the appropriate payment to Claude.The entry on August 10 for Logan Company is

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 12

International Financial Reporting Standards call for companies to mark the recorded values of certain types of assets and liabilities to fair value each period.These unrealized gains and losses are excluded from net income but included in comprehensive income and include all of the following except

Accepted Answer

A) Adjustments to pension plan assets. 
B) Gains from foreign currency translation. 
C) Unrealized losses on certain types of investments. 
D) Adjustment to fixed assets for depreciation. 
A) Adjustments to pension plan assets. 
B) Gains from foreign currency translation. 
C) Unrealized losses on certain types of investments. 
D) Adjustment to fixed assets for depreciation.

Question 13

196
Assume that Vangundy Company uses a periodic inventory system and has these account balances: Purchases €490,000; Purchase Returns and Allowances €14,000; Purchase Discounts €9,000; and Freight-in €15,000.Determine net purchases and cost of goods purchased.

Accepted Answer

The answer of 196
Assume that Vangundy Company uses a periodic...

Question 14

Touch Tronix, Inc.sells component parts to Advanced Communications, Inc.a cell phone manufacturer.On December 10, 2011, Touch Tronix, Inc.sold €680,000 of goods to Advanced Communications, Inc.on account for €880,000.Terms of the sale were 2/10, net 30.On December 18, 2011, Advanced Communications, Inc.paid the account in full.Which of the following is true regarding the impact on the statement of financial position for Touch Tronix, Inc.when the payment is made on December 18, 2011?

Accepted Answer

A) Assets decreased by €880,000. 
B) Assets decreased by €17,600. 
C) Assets increased by €862,400. 
D) Assets decreased by €13,000. 
A) Assets decreased by €880,000. 
B) Assets decreased by €17,600. 
C) Assets increased by €862,400. 
D) Assets decreased by €13,000.

Question 15

If a company determines cost of goods sold each time a sale occurs, it

Accepted Answer

A) must have a computer accounting system. 
B) uses a combination of the perpetual and periodic inventory systems. 
C) uses a periodic inventory system. 
D) uses a perpetual inventory system. 
A) must have a computer accounting system. 
B) uses a combination of the perpetual and periodic inventory systems. 
C) uses a periodic inventory system. 
D) uses a perpetual inventory system.

Question 16

If a company is given credit terms of 2/10, n/30, it should

Accepted Answer

A) hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time. 
B) pay within the discount period and recognize a savings. 
C) pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill. 
D) recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price. 
A) hold off paying the bill until the end of the credit period, while investing the money at 10% annual interest during this time. 
B) pay within the discount period and recognize a savings. 
C) pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill. 
D) recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price.

Question 17

Under a perpetual inventory system, inventory shrinkage and lost or stolen goods are more readily determined.

Accepted Answer

A) True 
 B)False

Question 18

The journal entry to record a credit sale is

Accepted Answer

A) Cash Sales 
B) Cash Service Revenue 
C) Accounts Receivable Service Revenue 
D) Accounts Receivable Sales 
A) Cash Sales 
B) Cash Service Revenue 
C) Accounts Receivable Service Revenue 
D) Accounts Receivable Sales

Question 19

On October 1, Belton Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each.During the month of October, the following transactions occurred.   Instructions
Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

Accepted Answer

The answer of On October 1, Belton Bicycle Store had...

Question 20

198
Slater Brothers Supply uses a periodic inventory system.During May, the following transactions and events occurred.   Instructions
Journalize the May transactions for Slater Brothers.You may omit explanations.

Accepted Answer

The answer of 198
Slater Brothers Supply uses a periodic inventory...

Financial information is presented below: Gross profit would be

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.

Cartier Company purchased inventory from Pissaro Company.The shipping costs were $400 and the terms of the shipment were FOB shipping point.Cartier would have the following entry regarding the shipping charges:

Which of the following would not be considered a merchandising company?

Under International Financial Reporting Standards (IFRS) operating expenses may be presented by nature or by function.

Birk Company sells merchandise on account for $3,000 to Kiner Company with credit terms of 2/10, n/30.Kiner Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period.What is the amount of the check?

In a worksheet for a merchandising company, Merchandise Inventory would appear in the

Detailed records of the cost of each inventory purchase and sale are not maintained under a

Logan Company made a purchase of merchandise on credit from Claude Corporation on August 3, for $3,000, terms 2/10, n/45.On August 10, Logan makes the appropriate payment to Claude.The entry on August 10 for Logan Company is

International Financial Reporting Standards call for companies to mark the recorded values of certain types of assets and liabilities to fair value each period.These unrealized gains and losses are excluded from net income but included in comprehensive income and include all of the following except

196 Assume that Vangundy Company uses a periodic inventory system and has these account balances: Purchases €490,000; Purchase Returns and Allowances €14,000; Purchase Discounts €9,000; and Freight-in €15,000.Determine net purchases and cost of goods purchased.

If a company determines cost of goods sold each time a sale occurs, it

If a company is given credit terms of 2/10, n/30, it should

Under a perpetual inventory system, inventory shrinkage and lost or stolen goods are more readily determined.

The journal entry to record a credit sale is

On October 1, Belton Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each.During the month of October, the following transactions occurred. Instructions Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

198 Slater Brothers Supply uses a periodic inventory system.During May, the following transactions and events occurred. Instructions Journalize the May transactions for Slater Brothers.You may omit explanations.

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

Financial information is presented below: Gross profit would be

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.

Cartier Company purchased inventory from Pissaro Company.The shipping costs were $400 and the terms of the shipment were FOB shipping point.Cartier would have the following entry regarding the shipping charges:

Which of the following would not be considered a merchandising company?

Under International Financial Reporting Standards (IFRS) operating expenses may be presented by nature or by function.

Birk Company sells merchandise on account for $3,000 to Kiner Company with credit terms of 2/10, n/30.Kiner Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period.What is the amount of the check?

In a worksheet for a merchandising company, Merchandise Inventory would appear in the

Detailed records of the cost of each inventory purchase and sale are not maintained under a

Logan Company made a purchase of merchandise on credit from Claude Corporation on August 3, for $3,000, terms 2/10, n/45.On August 10, Logan makes the appropriate payment to Claude.The entry on August 10 for Logan Company is

International Financial Reporting Standards call for companies to mark the recorded values of certain types of assets and liabilities to fair value each period.These unrealized gains and losses are excluded from net income but included in comprehensive income and include all of the following except

196 Assume that Vangundy Company uses a periodic inventory system and has these account balances: Purchases €490,000; Purchase Returns and Allowances €14,000; Purchase Discounts €9,000; and Freight-in €15,000.Determine net purchases and cost of goods purchased.

If a company determines cost of goods sold each time a sale occurs, it

If a company is given credit terms of 2/10, n/30, it should

Under a perpetual inventory system, inventory shrinkage and lost or stolen goods are more readily determined.

The journal entry to record a credit sale is

On October 1, Belton Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each.During the month of October, the following transactions occurred. Instructions Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

198 Slater Brothers Supply uses a periodic inventory system.During May, the following transactions and events occurred. Instructions Journalize the May transactions for Slater Brothers.You may omit explanations.

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