Exam 5: Retailing Operations

On 1 November 2016,Everett Janitorial Supply sold inventory on credit for $5 500,including GST,FOB destination,2/10,n/30.The inventory cost Everett $3 200,net of GST.What is the journal entry that records Cost of sales?

Purchase returns and allowances decrease the net amount of cash that will be paid for the inventory,and so they should reduce the cost of the inventory as recorded in the Inventory account.

A firm receives an invoice that indicates that title to the inventory will pass to the firm when they receive the goods.This situation is described as FOB destination.

The accounting cycle for a retailing business begins with the purchase of inventory.

Calculate the cost of sales for a retailer using the periodic inventory system from the following details. Purchases \ 520,000 Beginning inventory 180,000 Purchase returns and allowances 50,000 Purchase discounts 12,000 Freight in 18,000 Ending inventory 180,000

The entry to close Sales discounts and Sales returns and allowances results in a debit to Income summary.

With a periodic inventory method,purchases,purchase discounts and purchase returns and allowances are recorded in separate accounts.

FOB Destination means that the:

Gross profit is equal to Sales revenue less Sales returns and allowances and Sales discounts.

A company sold inventory for $24,000 on credit with terms of 3/15,n/30.The company uses a perpetual inventory system.After two days,it received defective inventory worth $2000.The journal entry to record the cash receipt for sale if the payment is received within 10 days of the invoice date would include:

A company that uses the perpetual inventory system purchases inventory for $60,000 on credit,with terms of 3/10,n/30.Which of the following is the journal entry to record the payment made within 3 days?

Net sales revenue is equal to Sales revenue less Cost of sales.

What is the difference between a sales return and a sales allowance?

Which of the following defines Gross profit?

In a descriptive format income statement,operating expenses are often classified into distribution,administration,marketing and finance expenses.

A firm uses the periodic inventory method.Which of the following entries would be made to record a $1 100 purchase of inventory on credit,including GST?

The ATO will refund any GST a registered firm pays to a supplier.

Which of the following is used to determine the rate of inventory turnover?

A company using the perpetual inventory system purchased inventory worth $24,000 on credit with terms of 2/10,n/30.Defective inventory of $2000 was returned 2 days later and the accounts were appropriately adjusted.If the invoice is paid within 10 days,the amount of the purchase discount that would be available to the company is:

Which of the following defines Net sales revenue?