Question 1

Instructions
Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

Accepted Answer

The answer of Instructions
Prepare the journal entries to record the...

Question 2

A merchandising company that sells directly to consumers is a

Accepted Answer

A) retailer. 
B) wholesaler. 
C) broker. 
D) service company. 
A) retailer. 
B) wholesaler. 
C) broker. 
D) service company. A

Question 3

During 2022, Parker 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. Parker's gross profit is

Accepted Answer

A) $24,000. 
B) $27,000. 
C) $45,000. 
D) $90,000. 
A) $24,000. 
B) $27,000. 
C) $45,000. 
D) $90,000. C

Question 4

Financial information is presented below:   Gross profit would be

Accepted Answer

A) $104,000. 
B) $116,000. 
C) $130,000. 
D) $142,000. 
A) $104,000. 
B) $116,000. 
C) $130,000. 
D) $142,000.

Question 5

Retailers and wholesalers are both considered merchandisers.

Accepted Answer

A) True 
 B)False

Question 6

During August 2022, Baxter's Supply Store generated revenues of $60,000.The company's expenses were as follows: cost of goods sold of $36,000 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. Baxter's non-operating income (loss) for the month of August 2022 is

Accepted Answer

A) $0. 
B) $1,000. 
C) $2,000. 
D) $3,000. 
A) $0. 
B) $1,000. 
C) $2,000. 
D) $3,000.

Question 7

During 2022, Parker 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. Parker's income from operations is

Accepted Answer

A) $18,000. 
B) $27,000. 
C) $45,000. 
D) $90,000. 
A) $18,000. 
B) $27,000. 
C) $45,000. 
D) $90,000.

Question 8

When a seller grants credit for returned goods, the account that is credited is

Accepted Answer

A) Sales Revenue. 
B) Sales Returns and Allowances. 
C) Inventory. 
D) Accounts Receivable. 
A) Sales Revenue. 
B) Sales Returns and Allowances. 
C) Inventory. 
D) Accounts Receivable.

Question 9

Inventories are defined by IFRS as

Accepted Answer

A) held-for-sale in the ordinary course of business. 
B) in the process of production for sale in the ordinary course of business. 
C) in the form of materials or supplies to be consumed in the production process or in the providing of services. 
D) All of these answer choices are correct.
IFRS. 
A) held-for-sale in the ordinary course of business. 
B) in the process of production for sale in the ordinary course of business. 
C) in the form of materials or supplies to be consumed in the production process or in the providing of services. 
D) All of these answer choices are correct.
IFRS.

Question 10

All of the following are contra revenue accounts except

Accepted Answer

A) sales revenue. 
B) sales allowances. 
C) sales discounts. 
D) sales returns. 
A) sales revenue. 
B) sales allowances. 
C) sales discounts. 
D) sales returns.

Question 11

Assume that Swann Company uses a periodic inventory system and has these account balances at the end of the period: Purchases $525,000; 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

Calculation of Net p

Question 12

In a perpetual inventory system, cost of goods sold is recorded

Accepted Answer

A) on a daily basis. 
B) on a monthly basis. 
C) on an annual basis. 
D) with each sale. 
A) on a daily basis. 
B) on a monthly basis. 
C) on an annual basis. 
D) with each sale.

Question 13

A credit granted to a customer for returned goods requires a debit to

Accepted Answer

A) Sales Revenue and a credit to Cash. 
B) Sales Returns and Allowances and a credit to Accounts Receivable. 
C) Accounts Receivable and a credit to a contra-revenue account. 
D) Cash and a credit to Sales Returns and Allowances. 
A) Sales Revenue and a credit to Cash. 
B) Sales Returns and Allowances and a credit to Accounts Receivable. 
C) Accounts Receivable and a credit to a contra-revenue account. 
D) Cash and a credit to Sales Returns and Allowances.

Question 14

The income statement is

Accepted Answer

A) required under GAAP but not under IFRS. 
B) required under IFRS in the same format as under GAAP. 
C) required under IFRS but not under GAAP. 
D) required under IFRS with some differences as compared to GAAP.
IFRS. 
A) required under GAAP but not under IFRS. 
B) required under IFRS in the same format as under GAAP. 
C) required under IFRS but not under GAAP. 
D) required under IFRS with some differences as compared to GAAP.
IFRS.

Question 15

Which one of the following is shown on a multiple-step but not on a single-step income statement?

Accepted Answer

A) Net sales 
B) Net income 
C) Gross profit 
D) Cost of goods sold 
A) Net sales 
B) Net income 
C) Gross profit 
D) Cost of goods sold

Question 16

The steps in the accounting cycle are different for a merchandising company than for a service company.

Accepted Answer

A) True 
 B)False

Question 17

Freight costs paid by a seller on merchandise sold to customers will cause an increase

Accepted Answer

A) in the selling expense of the buyer. 
B) in operating expenses for the seller. 
C) to the cost of goods sold of the seller. 
D) to a contra-revenue account of the seller. 
A) in the selling expense of the buyer. 
B) in operating expenses for the seller. 
C) to the cost of goods sold of the seller. 
D) to a contra-revenue account of the seller.

Question 18

Gross profit for a merchandiser is net sales minus

Accepted Answer

A) operating expenses. 
B) cost of goods sold. 
C) sales discounts. 
D) cost of goods available for sale. 
A) operating expenses. 
B) cost of goods sold. 
C) sales discounts. 
D) cost of goods available for sale.

Question 19

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60.Sheb receives payment on July 18.The entry by Sheb on July 18 is:

Accepted Answer

Question 20

To grant a customer a sales return, the seller credits Sales Returns and Allowances.

Accepted Answer

A) True 
 B)False

Instructions Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

A merchandising company that sells directly to consumers is a

During 2022, Parker 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. Parker's gross profit is

Financial information is presented below: Gross profit would be

Retailers and wholesalers are both considered merchandisers.

During 2022, Parker 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. Parker's income from operations is

When a seller grants credit for returned goods, the account that is credited is

Inventories are defined by IFRS as

All of the following are contra revenue accounts except

Assume that Swann Company uses a periodic inventory system and has these account balances at the end of the period: Purchases $525,000; Purchase Returns and Allowances $14,000; Purchase Discounts $9,000; and Freight-In $15,000.Determine net purchases and cost of goods purchased.

In a perpetual inventory system, cost of goods sold is recorded

A credit granted to a customer for returned goods requires a debit to

The income statement is

Which one of the following is shown on a multiple-step but not on a single-step income statement?

The steps in the accounting cycle are different for a merchandising company than for a service company.

Freight costs paid by a seller on merchandise sold to customers will cause an increase

Gross profit for a merchandiser is net sales minus

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60.Sheb receives payment on July 18.The entry by Sheb on July 18 is:

To grant a customer a sales return, the seller credits Sales Returns and Allowances.

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: Organisations, Stock Transactions and Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Payroll Accounting

Other Significant Liabilities

Filters

Exam 5: Accounting for Merchandising Operations

Instructions Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

A merchandising company that sells directly to consumers is a

During 2022, Parker 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. Parker's gross profit is

Financial information is presented below: Gross profit would be

Retailers and wholesalers are both considered merchandisers.

During 2022, Parker 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. Parker's income from operations is

When a seller grants credit for returned goods, the account that is credited is

Inventories are defined by IFRS as

All of the following are contra revenue accounts except

Assume that Swann Company uses a periodic inventory system and has these account balances at the end of the period: Purchases $525,000; Purchase Returns and Allowances $14,000; Purchase Discounts $9,000; and Freight-In $15,000.Determine net purchases and cost of goods purchased.

In a perpetual inventory system, cost of goods sold is recorded

A credit granted to a customer for returned goods requires a debit to

The income statement is

Which one of the following is shown on a multiple-step but not on a single-step income statement?

The steps in the accounting cycle are different for a merchandising company than for a service company.

Freight costs paid by a seller on merchandise sold to customers will cause an increase

Gross profit for a merchandiser is net sales minus

On July 9, Sheb Company sells goods on credit to Wooley Company for $5,000, terms 1/10, n/60.Sheb receives payment on July 18.The entry by Sheb on July 18 is:

To grant a customer a sales return, the seller credits Sales Returns and Allowances.

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: Organisations, Stock Transactions and Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Payroll Accounting

Other Significant Liabilities

Filters