A) Is another term for revenue. B) Is another term for merchandise sales. C) Is also called gross margin. D) Is a term only used by service firms. E) Is the term used for the expense of buying and preparing merchandise for sale. A) Is another term for revenue. B) Is another term for merchandise sales. C) Is also called gross margin. D) Is a term only used by service firms. E) Is the term used for the expense of buying and preparing merchandise for sale.

Exam 5: Accounting for Merchandising Operations

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classes of items.

(True/False)

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Question 61

Merchandise inventory is reported in the long-term assets section of the balance sheet.

(True/False)

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Question 62

Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Cost of goods sold equals:

(Multiple Choice)

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Question 63

Cash sales shorten the operating cycle for a merchandiser; credit sales lengthen operating cycles.

(True/False)

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Question 64

The acid-test ratio is defined as current assets divided by current liabilities.

(True/False)

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Question 65

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

(True/False)

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Question 66

Match the following definitions with correct terms

A widely used income statement format that lists cost of goods sold as another expense and shows only one subtotal for total expenses.

Selling expenses

A measure of a company’s ability fo pay ifs current liabilities that excludes less liquid current assets such as inventory and prepaid expenses.

Inventory shrinkage

The expenses that support a company's overall operations and include costs related to accounting, human resource management and financial management.

Merchandise inventory

Correct Answer:

Verified

A widely used income statement format that lists cost of goods sold as another expense and shows only one subtotal for total expenses.

A measure of a company’s ability fo pay ifs current liabilities that excludes less liquid current assets such as inventory and prepaid expenses.

The expenses that support a company's overall operations and include costs related to accounting, human resource management and financial management.

The point of transfer from seller to buyer that fakes place when the goods arrive at the buyer's place of business.

The expenses of promoting sales by displaying and advertising merchandise, making sales, and delivering goods to customers

An income statement format that shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classe of items.

Products a company owns and intends fo sell

The point of transfer from seller fo buyer that fakes place when goods depart the sellers place of business

Inventory losses that can occur as a result of theft or deterioration and require an adjusting entry to account for those losses.

A given percent deducted from a list price often granted fo customers purchasing large quantities of merchandise

(Matching)

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Question 67

A company had net sales of $752,000 and cost of goods sold of $543,000. Its net income was $17,530. The company's gross margin ratio equals:

(Multiple Choice)

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Question 68

Describe the difference between wholesalers and retailers.

(Essay)

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Question 69

Cost of goods sold:

(Multiple Choice)

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Question 70

Expenses related to accounting, human resource management, and financial management are known as selling expenses.

(True/False)

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Question 71

Sales Discounts is added to the Sales account when computing a company's net sales.

(True/False)

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Question 72

A service company earns net income by buying and selling merchandise.

(True/False)

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Question 73

In a perpetual inventory system, the Merchandise Inventory account must be closed at the end of the accounting period.

(True/False)

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Question 74

What is inventory shrinkage? How do managers account for shrinkage?

(Essay)

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Question 75

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 28 is:

(Multiple Choice)

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Question 76

The net method initially records the invoice at its net amount (net of any cash discount).

(True/False)

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Question 77

Multiple-step income statements:

(Multiple Choice)

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Question 78

A merchandiser's classified balance sheet reports merchandise inventory as a current asset.

(True/False)

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Question 79

Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals:

(Multiple Choice)

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Question 80

Showing 61 - 80 of 182

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses, and reports subtotals for various classes of items.

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Cost of goods sold equals:

Cash sales shorten the operating cycle for a merchandiser; credit sales lengthen operating cycles.

The acid-test ratio is defined as current assets divided by current liabilities.

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

A company had net sales of $752,000 and cost of goods sold of $543,000. Its net income was $17,530. The company's gross margin ratio equals:

Describe the difference between wholesalers and retailers.

Cost of goods sold:

Expenses related to accounting, human resource management, and financial management are known as selling expenses.

Sales Discounts is added to the Sales account when computing a company's net sales.

A service company earns net income by buying and selling merchandise.

In a perpetual inventory system, the Merchandise Inventory account must be closed at the end of the accounting period.

What is inventory shrinkage? How do managers account for shrinkage?

The net method initially records the invoice at its net amount (net of any cash discount).

Multiple-step income statements:

A merchandiser's classified balance sheet reports merchandise inventory as a current asset.

Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

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