Question 1

The primary source of revenue for a wholesaler is

Accepted Answer

A) investment income. 
B) service fees. 
C) the sale of merchandise. 
D) the sale of fixed assets the company owns. 
A) investment income. 
B) service fees. 
C) the sale of merchandise. 
D) the sale of fixed assets the company owns.

Question 2

Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30.Langston Company returns $1,000 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) $3,920 
B) $4,000 
C) $4,900 
D) $4,920 
A) $3,920 
B) $4,000 
C) $4,900 
D) $4,920

Question 3

Net sales is sales revenue less

Accepted Answer

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

Question 4

Net income is gross profit less

Accepted Answer

A) financing expenses. 
B) operating expenses. 
C) other revenues and losses. 
D) other income. 
A) financing expenses. 
B) operating expenses. 
C) other revenues and losses. 
D) other income.

Question 5

McKendrick Shoe Store has a beginning inventory of $45,000.During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000.A physical count of inventory at the end of the period revealed that $30,000 was still on hand.The cost of goods available for sale was

Accepted Answer

A) $189,000. 
B) $204,000. 
C) $219,000. 
D) $249,000. 
A) $189,000. 
B) $204,000. 
C) $219,000. 
D) $249,000.

Question 6

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

Accepted Answer

The answer of Scruffy Brothers Supply uses a periodic inventory...

Question 7

Cost of goods available for sale is computed by adding

Accepted Answer

A) beginning inventory to net purchases. 
B) beginning inventory to the cost of goods purchased. 
C) net purchases and freight-in. 
D) purchases to beginning inventory. 
A) beginning inventory to net purchases. 
B) beginning inventory to the cost of goods purchased. 
C) net purchases and freight-in. 
D) purchases to beginning inventory.

Question 8

On October 4, 2022, JT Corporation had credit sales transactions of $4,000 from merchandise having cost $2,400.The entries to record the day's credit transactions include a

Accepted Answer

A) debit of $4,000 to Inventory. 
B) credit of $4,000 to Sales Revenue. 
C) debit of $2,400 to Inventory. 
D) credit of $2,400 to Cost of Goods Sold. 
A) debit of $4,000 to Inventory. 
B) credit of $4,000 to Sales Revenue. 
C) debit of $2,400 to Inventory. 
D) credit of $2,400 to Cost of Goods Sold.

Question 9

Company A sells $2,500 of merchandise on account to Company B with credit terms of 2/10, n/30.If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

Accepted Answer

A) $1,750 
B) $2,000 
C) $2,250 
D) $2,450 
A) $1,750 
B) $2,000 
C) $2,250 
D) $2,450

Question 10

An enterprise which sells goods to customers is known as a

Accepted Answer

A) proprietorship. 
B) corporation. 
C) retailer. 
D) service firm. 
A) proprietorship. 
B) corporation. 
C) retailer. 
D) service firm.

Question 11

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 12

If a merchandising company sells land at more than its cost, the gain should be reported in the sales revenue section of the income statement.

Accepted Answer

A) True 
 B)False

Question 13

The operating expense section of an income statement for a wholesaler would not include

Accepted Answer

A) freight-out. 
B) utilities expense. 
C) cost of goods sold. 
D) insurance expense. 
A) freight-out. 
B) utilities expense. 
C) cost of goods sold. 
D) insurance expense.

Question 14

Detailed records of goods held for resale 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 15

Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?

Accepted Answer

A) Cash received on account with a discount 
B) Payment of freight costs on a purchase 
C) Return of merchandise sold 
D) Sale of merchandise on credit 
A) Cash received on account with a discount 
B) Payment of freight costs on a purchase 
C) Return of merchandise sold 
D) Sale of merchandise on credit

Question 16

The respective normal account balances of Purchases, Purchase Discounts, and Freight-In are

Accepted Answer

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

Question 17

Garth Company sold goods on account to Kyle Enterprises with terms of 2/10, n/30.The goods had a cost of $600 and a selling price of $1,100.Both Garth and Kyle use a perpetual inventory system.Record the sale on the books of Garth and the purchase on the books of Kyle.

Accepted Answer

Journal en

Question 18

The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be

Accepted Answer

Question 19

Under IFRS, income statement items are generally described as

Accepted Answer

A) administration, distribution, manufacturing, etc. 
B) salaries, depreciation, utilities, etc. 
C) administration, depreciation, manufacturing, etc. 
D) salaries, distribution, utilities, etc.
IFRS. 
A) administration, distribution, manufacturing, etc. 
B) salaries, depreciation, utilities, etc. 
C) administration, depreciation, manufacturing, etc. 
D) salaries, distribution, utilities, etc.
IFRS.

Question 20

Prepare the necessary journal entries on the books of Kelly Carpet Company to record the following transactions, assuming a perpetual inventory system (you may omit explanations):
(a) Kelly purchased $45,000 of merchandise on account, terms 2/10, n/30.
(b) Returned $3,000 of damaged merchandise for credit.
(c) Paid for the merchandise purchased within 10 days.

Accepted Answer

The answer of Prepare the necessary journal entries on the...

The primary source of revenue for a wholesaler is

Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30.Langston Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period.What is the amount of the check?

Net sales is sales revenue less

Net income is gross profit less

McKendrick Shoe Store has a beginning inventory of $45,000.During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000.A physical count of inventory at the end of the period revealed that $30,000 was still on hand.The cost of goods available for sale was

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

Cost of goods available for sale is computed by adding

On October 4, 2022, JT Corporation had credit sales transactions of $4,000 from merchandise having cost $2,400.The entries to record the day's credit transactions include a

Company A sells $2,500 of merchandise on account to Company B with credit terms of 2/10, n/30.If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

An enterprise which sells goods to customers is known as a

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

If a merchandising company sells land at more than its cost, the gain should be reported in the sales revenue section of the income statement.

The operating expense section of an income statement for a wholesaler would not include

Detailed records of goods held for resale are not maintained under a

Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?

The respective normal account balances of Purchases, Purchase Discounts, and Freight-In are

Garth Company sold goods on account to Kyle Enterprises with terms of 2/10, n/30.The goods had a cost of $600 and a selling price of $1,100.Both Garth and Kyle use a perpetual inventory system.Record the sale on the books of Garth and the purchase on the books of Kyle.

The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be

Under IFRS, income statement items are generally described as

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 primary source of revenue for a wholesaler is

Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30.Langston Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period.What is the amount of the check?

Net sales is sales revenue less

Net income is gross profit less

McKendrick Shoe Store has a beginning inventory of $45,000.During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000.A physical count of inventory at the end of the period revealed that $30,000 was still on hand.The cost of goods available for sale was

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

Cost of goods available for sale is computed by adding

On October 4, 2022, JT Corporation had credit sales transactions of $4,000 from merchandise having cost $2,400.The entries to record the day's credit transactions include a

Company A sells $2,500 of merchandise on account to Company B with credit terms of 2/10, n/30.If Company B remits a check taking advantage of the discount offered, what is the amount of Company B's check?

An enterprise which sells goods to customers is known as a

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

If a merchandising company sells land at more than its cost, the gain should be reported in the sales revenue section of the income statement.

The operating expense section of an income statement for a wholesaler would not include

Detailed records of goods held for resale are not maintained under a

Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?

The respective normal account balances of Purchases, Purchase Discounts, and Freight-In are

Garth Company sold goods on account to Kyle Enterprises with terms of 2/10, n/30.The goods had a cost of $600 and a selling price of $1,100.Both Garth and Kyle use a perpetual inventory system.Record the sale on the books of Garth and the purchase on the books of Kyle.

The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be

Under IFRS, income statement items are generally described as

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