Question 1

The terms 2/10, n/30 state that a 2% discount is available if the invoice is paid within the first 10 days of the next month.

Accepted Answer

A) True 
 B)False

Question 2

Charlie Company uses a perpetual inventory system.During May, the following transactions and events occurred.   Instructions
Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system.You may omit explanations.Round amounts to nearest dollar.

Accepted Answer

The answer of Charlie Company uses a perpetual inventory system.During...

Question 3

The income statement for Pepe Serna Company for the year ended December 31, 2022 is as follows:   Prepare the entries to close the revenue and expense accounts at December 31, 2022.You may omit explanations for the transactions.

Accepted Answer

The answer of The income statement for Pepe Serna Company...

Question 4

Presented here are the components in Bradley Company's income statement.Determine the missing amounts.

Accepted Answer

The answer of Presented here are the components in Bradley...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) Retailer 
B) Wholesaler 
C) Service firm 
D) All of these are considered a merchandising company. 
A) Retailer 
B) Wholesaler 
C) Service firm 
D) All of these are considered a merchandising company.

Question 7

The collection of a $6,000 account within the 2 percent discount period will result in a

Accepted Answer

A) debit to Sales Discounts for $120. 
B) debit to Accounts Receivable for $5,880. 
C) credit to Cash for $5,880. 
D) credit to Accounts Receivable for $5,880. 
A) debit to Sales Discounts for $120. 
B) debit to Accounts Receivable for $5,880. 
C) credit to Cash for $5,880. 
D) credit to Accounts Receivable for $5,880.

Question 8

Dawson's Fashions sold merchandise for $40,000 cash during the month of July.Returns that month totaled $1,000.If the company's gross profit rate is 40%, Dawson's will report monthly net sales revenue and cost of goods sold of

Accepted Answer

A) $39,000 and $23,400. 
B) $39,000 and $24,000. 
C) $40,000 and $23,400. 
D) $40,000 and $24,000. 
A) $39,000 and $23,400. 
B) $39,000 and $24,000. 
C) $40,000 and $23,400. 
D) $40,000 and $24,000.

Question 9

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

Accepted Answer

A) credit, credit, credit. 
B) debit, credit, debit. 
C) credit, debit, debit. 
D) credit, debit, credit. 
A) credit, credit, credit. 
B) debit, credit, debit. 
C) credit, debit, debit. 
D) credit, debit, credit.

Question 10

Which of the following accounts is not closed to Income Summary?

Accepted Answer

A) Cost of Goods Sold 
B) Inventory 
C) Sales Revenue 
D) Sales Discounts 
A) Cost of Goods Sold 
B) Inventory 
C) Sales Revenue 
D) Sales Discounts

Question 11

Financial information is presented below:   The gross profit rate would be

Accepted Answer

A) .36. 
B) .40. 
C) .46. 
D) .50. 
A) .36. 
B) .40. 
C) .46. 
D) .50.

Question 12

Under IFRS, companies must classify income statement items by

Accepted Answer

A) function. 
B) nature. 
C) nature or function 
D) date incurred.
IFRS. 
A) function. 
B) nature. 
C) nature or function 
D) date incurred.
IFRS.

Question 13

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

Accepted Answer

A) Inventory. 
B) Purchase Discounts. 
C) Purchase Allowance. 
D) Sales Discounts. 
A) Inventory. 
B) Purchase Discounts. 
C) Purchase Allowance. 
D) Sales Discounts.

Question 14

Merchandisers apply the revenue recognition principle by recognizing sales revenues when the performance obligation is satisfied.

Accepted Answer

A) True 
 B)False

Question 15

The following information is available for Dennehy Company:   Dennehy's cost of goods sold is

Accepted Answer

A) $262,500. 
B) $285,000. 
C) $292,500. 
D) $345,000. 
A) $262,500. 
B) $285,000. 
C) $292,500. 
D) $345,000.

Question 16

Which of the following is a true statement about inventory systems?

Accepted Answer

A) Periodic inventory systems require more detailed inventory records. 
B) Perpetual inventory systems require more detailed inventory records. 
C) A periodic system requires cost of goods sold be determined after each sale. 
D) A perpetual system determines cost of goods sold only at the end of the accounting period. 
A) Periodic inventory systems require more detailed inventory records. 
B) Perpetual inventory systems require more detailed inventory records. 
C) A periodic system requires cost of goods sold be determined after each sale. 
D) A perpetual system determines cost of goods sold only at the end of the accounting period.

Question 17

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

Accepted Answer

A) Inventory account will be increased. 
B) Inventory account will not be affected. 
C) seller will bear the freight cost. 
D) carrier will bear the freight cost. 
A) Inventory account will be increased. 
B) Inventory account will not be affected. 
C) seller will bear the freight cost. 
D) carrier will bear the freight cost.

Question 18

The use of IFRS results in the number of transactions affecting inventory to be

Accepted Answer

A) more than under GAAP. 
B) the same as under GAAP. 
C) less than under GAAP. 
D) to be zero.
IFRS. 
A) more than under GAAP. 
B) the same as under GAAP. 
C) less than under GAAP. 
D) to be zero.
IFRS.

Question 19

Financial information is presented below:   The gross profit rate would be

Accepted Answer

A) .13. 
B) .40. 
C) .60. 
D) .73. 
A) .13. 
B) .40. 
C) .60. 
D) .73.

Question 20

The credit terms offered to a customer by a business firm are 2/10, n/30, which means that

Accepted Answer

A) the customer must pay the bill within 10 days. 
B) the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date. 
C) the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date. 
D) two sales returns can be made within 10 days of the invoice date and no returns thereafter. 
A) the customer must pay the bill within 10 days. 
B) the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date. 
C) the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date. 
D) two sales returns can be made within 10 days of the invoice date and no returns thereafter.

The terms 2/10, n/30 state that a 2% discount is available if the invoice is paid within the first 10 days of the next month.

Charlie Company uses a perpetual inventory system.During May, the following transactions and events occurred. Instructions Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system.You may omit explanations.Round amounts to nearest dollar.

The income statement for Pepe Serna Company for the year ended December 31, 2022 is as follows: Prepare the entries to close the revenue and expense accounts at December 31, 2022.You may omit explanations for the transactions.

Presented here are the components in Bradley Company's income statement.Determine the missing amounts.

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

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

The collection of a $6,000 account within the 2 percent discount period will result in a

Dawson's Fashions sold merchandise for $40,000 cash during the month of July.Returns that month totaled $1,000.If the company's gross profit rate is 40%, Dawson's will report monthly net sales revenue and cost of goods sold of

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

Which of the following accounts is not closed to Income Summary?

Financial information is presented below: The gross profit rate would be

Under IFRS, companies must classify income statement items by

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

Merchandisers apply the revenue recognition principle by recognizing sales revenues when the performance obligation is satisfied.

The following information is available for Dennehy Company: Dennehy's cost of goods sold is

Which of the following is a true statement about inventory systems?

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

The use of IFRS results in the number of transactions affecting inventory to be

Financial information is presented below: The gross profit rate would be

The credit terms offered to a customer by a business firm are 2/10, n/30, which means that

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

The terms 2/10, n/30 state that a 2% discount is available if the invoice is paid within the first 10 days of the next month.

Charlie Company uses a perpetual inventory system.During May, the following transactions and events occurred. Instructions Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system.You may omit explanations.Round amounts to nearest dollar.

The income statement for Pepe Serna Company for the year ended December 31, 2022 is as follows: Prepare the entries to close the revenue and expense accounts at December 31, 2022.You may omit explanations for the transactions.

Presented here are the components in Bradley Company's income statement.Determine the missing amounts.

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

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

The collection of a $6,000 account within the 2 percent discount period will result in a

Dawson's Fashions sold merchandise for $40,000 cash during the month of July.Returns that month totaled $1,000.If the company's gross profit rate is 40%, Dawson's will report monthly net sales revenue and cost of goods sold of

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

Which of the following accounts is not closed to Income Summary?

Financial information is presented below: The gross profit rate would be

Under IFRS, companies must classify income statement items by

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

Merchandisers apply the revenue recognition principle by recognizing sales revenues when the performance obligation is satisfied.

The following information is available for Dennehy Company: Dennehy's cost of goods sold is

Which of the following is a true statement about inventory systems?

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

The use of IFRS results in the number of transactions affecting inventory to be

Financial information is presented below: The gross profit rate would be

The credit terms offered to a customer by a business firm are 2/10, n/30, which means that

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