A) Measures return on assets. B) Is also called the quick ratio. C) Is generally greater than the current ratio. D) Measures profitability. E) Measures inventory turnover. A) Measures return on assets. B) Is also called the quick ratio. C) Is generally greater than the current ratio. D) Measures profitability. E) Measures inventory turnover.

A) Refer to reductions in the selling price of merchandise sold to customers. B) Represent trade discounts. C) Are not recorded under the perpetual inventory system until the end of each accounting period. D) Refer to merchandise that customers return to the seller after the sale. E) Represent cash discounts. A) Refer to reductions in the selling price of merchandise sold to customers. B) Represent trade discounts. C) Are not recorded under the perpetual inventory system until the end of each accounting period. D) Refer to merchandise that customers return to the seller after the sale. E) Represent cash discounts.

Exam 5: Accounting for Merchandising Operations

The Merchandise Inventory account balance at the beginning of the current period is equal to the amount of ending Merchandise Inventory from the previous period.

(True/False)

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Question 81

Explain the way in which costs flow through the merchandise inventory account to a merchandiser's income statement.

(Essay)

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Question 82

Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.

(True/False)

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Question 83

Under a periodic inventory system, purchases, purchases returns and allowances, purchase discounts, and transportation in transactions are recorded in the Merchandise Inventory account.

(True/False)

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Question 84

All of the following statements related to U.S. GAAP and IFRS are true except:

(Multiple Choice)

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Question 85

A journal entry with a debit to cash of $980, a debit to Sales Discounts of $20, and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

(True/False)

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Question 86

The acid-test ratio:

(Multiple Choice)

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Question 87

The profit margin ratio is the same as the gross profit ratio.

(True/False)

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Question 88

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is:

(Multiple Choice)

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Question 89

The gross margin ratio is defined as gross margin divided by net sales.

(True/False)

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Question 90

Mega Skateboard Supplier had net sales of $2.8 million, its cost of goods sold was $1.6 million, and its net income was $0.9 million. Its gross margin ratio equals:

(Multiple Choice)

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Question 91

Sales returns:

(Multiple Choice)

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Question 92

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

(True/False)

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Question 93

Describe the recording process (including costs)for the types of transactions involved in purchasing merchandise inventory when a perpetual inventory system is used.

(Essay)

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Question 94

Describe why tracking inventory activities are necessary for a merchandising company.

(Essay)

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Question 95

All of the following statements regarding inventory shrinkage are true except:

(Multiple Choice)

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Question 96

Each sale of merchandise has two parts: the revenue side and the cost side.

(True/False)

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Question 97

A perpetual inventory system is able to directly measure and monitor inventory shrinkage and there is no need for a physical count of inventory.

(True/False)

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Question 98

The amount recorded for merchandise inventory includes all of the following except:

(Multiple Choice)

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Question 99

A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account.

(True/False)

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Question 100

Showing 81 - 100 of 182

The Merchandise Inventory account balance at the beginning of the current period is equal to the amount of ending Merchandise Inventory from the previous period.

Explain the way in which costs flow through the merchandise inventory account to a merchandiser's income statement.

Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.

Under a periodic inventory system, purchases, purchases returns and allowances, purchase discounts, and transportation in transactions are recorded in the Merchandise Inventory account.

All of the following statements related to U.S. GAAP and IFRS are true except:

A journal entry with a debit to cash of $980, a debit to Sales Discounts of $20, and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

The acid-test ratio:

The profit margin ratio is the same as the gross profit ratio.

The gross margin ratio is defined as gross margin divided by net sales.

Mega Skateboard Supplier had net sales of $2.8 million, its cost of goods sold was $1.6 million, and its net income was $0.9 million. Its gross margin ratio equals:

Sales returns:

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Describe the recording process (including costs)for the types of transactions involved in purchasing merchandise inventory when a perpetual inventory system is used.

Describe why tracking inventory activities are necessary for a merchandising company.

All of the following statements regarding inventory shrinkage are true except:

Each sale of merchandise has two parts: the revenue side and the cost side.

A perpetual inventory system is able to directly measure and monitor inventory shrinkage and there is no need for a physical count of inventory.

The amount recorded for merchandise inventory includes all of the following except:

A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account.

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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