Question 1

In a multi-step income statement,Operating income includes selling expenses,general expenses and other revenue and expense.

Accepted Answer

A) True 
 B)False  False

Question 2

Both purchase discounts and sales discounts appear on the income statement of a company that uses the perpetual inventory method.

Accepted Answer

A) True 
 B)False  False

Question 3

Beginning inventory is $42,000 and Ending inventory is $58,000.Cost of goods sold is $600,000.Calculate days in inventory.

Accepted Answer

A)  30.4 
B)  25.6 
C)  135.3 
D)  3.4 
A)  30.4 
B)  25.6 
C)  135.3 
D)  3.4 A

Question 4

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1.
-Which of the following journal entries properly records this transaction?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Purchases } & 10,000 & \
\hline \text { Accounts payable } & & 10,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Purchases } & & 10,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 10,000 & \
\hline \text { Accounts payable } & & 10,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 10,000 & \
\hline \text { Cash } & & 10,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Purchases } & 10,000 & \
\hline \text { Accounts payable } & & 10,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Purchases } & & 10,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 10,000 & \
\hline \text { Accounts payable } & & 10,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 10,000 & \
\hline \text { Cash } & & 10,000 \
\hline
\end{array}$$

Question 5

The accounting cycle for a merchandising company begins with the purchase of inventory.

Accepted Answer

A) True 
 B)False

Question 6

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received 20 days later?

Accepted Answer

A)  The accounting entry would be an $800 debit to Cash and an $800 credit to Accounts receivable. 
B)  The accounting entry would be a $784 debit to Cash, a $16 debit to Sales discounts and an $800 credit to Accounts receivable. 
C)  The accounting entry would be a $16 debit to Sales discounts, an $800 debit to Cash and an $816 credit to Accounts receivable. 
D)  The accounting entry would be an $800 debit to Cash, a $16 credit to Sales discounts and a $784 credit to Accounts receivable. 
A)  The accounting entry would be an $800 debit to Cash and an $800 credit to Accounts receivable. 
B)  The accounting entry would be a $784 debit to Cash, a $16 debit to Sales discounts and an $800 credit to Accounts receivable. 
C)  The accounting entry would be a $16 debit to Sales discounts, an $800 debit to Cash and an $816 credit to Accounts receivable. 
D)  The accounting entry would be an $800 debit to Cash, a $16 credit to Sales discounts and a $784 credit to Accounts receivable.

Question 7

Baltic Supplies provides the worksheet shown below at the end of the year:
A count of the physical inventory at year end shows that there is actually $11,000 of inventory left.In addition,there was $800 of accrued salary,and $200 of depreciation.Please post the adjustments to the worksheet and update the adjusted trial balance.Then complete the worksheet.

Accepted Answer

This question is no

Question 8

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1.
-Avery paid the supplier on February 9.Which of the following journal entries properly records this payment transaction?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 9,700 & \
\hline \text { Cash } & & 9,700 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 9,700 & \
\hline \text { Purchase discounts } & 300 & \
\hline \text { Purchases } & & 10,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Cash } & & 9,700 \
\hline \text { Purchase discounts } & & 300 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Cash } & & 10,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 9,700 & \
\hline \text { Cash } & & 9,700 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 9,700 & \
\hline \text { Purchase discounts } & 300 & \
\hline \text { Purchases } & & 10,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Cash } & & 9,700 \
\hline \text { Purchase discounts } & & 300 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 10,000 & \
\hline \text { Cash } & & 10,000 \
\hline
\end{array}$$

Question 9

Which of the following defines Gross profit?

Accepted Answer

A)  Sales revenue less Sales discounts and allowances 
B)  Sales revenue less Operating expenses 
C)  Net sales revenue less Sales discounts 
D)  Net sales revenue less Cost of goods sold 
A)  Sales revenue less Sales discounts and allowances 
B)  Sales revenue less Operating expenses 
C)  Net sales revenue less Sales discounts 
D)  Net sales revenue less Cost of goods sold

Question 10

An adjusted trial balance is shown below.
 $$\begin{array} { | l | r | r | } 
\hline &  { \text { Debit } } & { \text { Credit } } \
\hline \text { Cash } & \$ 12,600 & \
\hline \text { Accounts receivable } & 2,400 & \
\hline \text { Prepaid rent } & 800 & \
\hline \text { Inventory } & 28,000 & \
\hline \text { Accounts payable } & & \$ 4,200 \
\hline \text { Salary payable } & & 1,000 \
\hline \text { Notes payable } & & 800 \
\hline \text { Capital } & & 13,800 \
\hline \text { Drawing } & 1,000 &  \
\hline \text { Sales revenue } & &96,000 \
\hline\text { Sales returns and allowances }&1,600\ 
\hline \text { Sales discounts } & 400 & \
\hline \text { Cost of goods sold } & 25,000 & \
\hline \text { Salary expense } & 21,000 & \
\hline \text { Rent expens } & 14,000 & \
\hline \text { Depreciation expense } & 8,500 & \
\hline \text { Supplies expense } & 500 & \
\hline \text { Total } & \$ 115,800 & \$ 115,800 \
\hline
\end{array}$$

-Please prepare the second closing entry.
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \\hline \\hline \\hline \\hline \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | r | r | } 
\hlin

Question 11

What is a purchase return?

Accepted Answer

A)  A return of merchandise that is defective or damaged 
B)  A customer refund from the sale of inventory 
C)  A price reduction 
D)  A return of cash to the purchaser 
A)  A return of merchandise that is defective or damaged 
B)  A customer refund from the sale of inventory 
C)  A price reduction 
D)  A return of cash to the purchaser

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000.Which of the following entries is needed to record the shrinkage?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cost of goods sold } & 1,000 & \
\hline \text { Shrinkage expense } & & 1,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 1,000 & \
\hline \text { Cost of goods sold } & & 1,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cost of goods sold } & 1,000 & \
\hline \text { Inventory } & & 1,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Inventory } & & 1,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cost of goods sold } & 1,000 & \
\hline \text { Shrinkage expense } & & 1,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 1,000 & \
\hline \text { Cost of goods sold } & & 1,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cost of goods sold } & 1,000 & \
\hline \text { Inventory } & & 1,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Inventory } & & 1,000 \
\hline
\end{array}$$

Question 14

An adjusted trial balance is shown below. $$\begin{array} { | l | r | r | } 
\hline &  { \text { Debit } } & { \text { Credit } } \
\hline \text { Cash } & \$ 12,600 & \
\hline \text { Accounts receivable } & 2,400 & \
\hline \text { Prepaid rent } & 800 & \
\hline \text { Inventory } & 28,000 & \
\hline \text { Accounts payable } & & \$ 4,200 \
\hline \text { Salary payable } & & 1,000 \
\hline \text { Notes payable } & & 800 \
\hline \text { Capital } & & 13,800 \
\hline \text { Drawing } & 1,000 &  \
\hline \text { Sales revenue } & &96,000 \
\hline\text { Sales returns and allowances }&1,600\ 
\hline \text { Sales discounts } & 400 & \
\hline \text { Cost of goods sold } & 25,000 & \
\hline \text { Salary expense } & 21,000 & \
\hline \text { Rent expens } & 14,000 & \
\hline \text { Depreciation expense } & 8,500 & \
\hline \text { Supplies expense } & 500 & \
\hline \text { Total } & \$ 115,800 & \$ 115,800 \
\hline
\end{array}$$ What will the final balance in Capital be after the closing entries?

Accepted Answer

A)  $37,800 
B)  $12,700 
C)  $24,000 
D)  $36,800 
A)  $37,800 
B)  $12,700 
C)  $24,000 
D)  $36,800

Question 15

The following pertains to periodic inventory: On a merchandising income statement,which would NOT be found under the heading of Cost of goods sold?

Accepted Answer

A)  Supplies 
B)  Freight-in 
C)  Purchases returns and allowances 
D)  Purchases 
A)  Supplies 
B)  Freight-in 
C)  Purchases returns and allowances 
D)  Purchases

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

Accepted Answer

A)  debit to Cost of goods sold and a credit to Inventory. 
B)  debit to Cost of goods sold and a credit to Cash. 
C)  debit to Inventory and a credit to Cost of goods sold. 
D)  debit to Inventory and a credit to Cash. 
A)  debit to Cost of goods sold and a credit to Inventory. 
B)  debit to Cost of goods sold and a credit to Cash. 
C)  debit to Inventory and a credit to Cost of goods sold. 
D)  debit to Inventory and a credit to Cash.

Question 18

Which of the following is the gross profit percentage?

Accepted Answer

A)  Gross profit minus net sales revenue 
B)  Gross profit divided by net sales revenue 
C)  Gross profit plus net sales revenue 
D)  Gross profit times net sales revenue 
A)  Gross profit minus net sales revenue 
B)  Gross profit divided by net sales revenue 
C)  Gross profit plus net sales revenue 
D)  Gross profit times net sales revenue

Question 19

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.
-On April 10,Michelin received payment from the customer.Which of the following entries correctly records the cash receipt on Michelin's books?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 7,760 & \
\hline \text { Sales discount } & 240 & \
\hline \text { Accounts receivable } & & 8,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 8,000 & \
\hline \text { Sales discount } & & 240 \
\hline \text { Cash } & & 7,760 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 8,000 & \
\hline \text { Accounts receivable } & & 8,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 7,760 & \
\hline \text { Accounts receivable } & & 7,760 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 7,760 & \
\hline \text { Sales discount } & 240 & \
\hline \text { Accounts receivable } & & 8,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 8,000 & \
\hline \text { Sales discount } & & 240 \
\hline \text { Cash } & & 7,760 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 8,000 & \
\hline \text { Accounts receivable } & & 8,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 7,760 & \
\hline \text { Accounts receivable } & & 7,760 \
\hline
\end{array}$$

Question 20

A company uses the perpetual inventory system.The inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $43,000.Which of the following would be included in the required adjusting entry?

Accepted Answer

A)  A $43,000 credit to Inventory would be required. 
B)  A $50,000 debit to Cost of goods sold would be required. 
C)  A $7,000 credit to Cost of goods sold would be required. 
D)  A $7,000 credit to Inventory would be required. 
A)  A $43,000 credit to Inventory would be required. 
B)  A $50,000 debit to Cost of goods sold would be required. 
C)  A $7,000 credit to Cost of goods sold would be required. 
D)  A $7,000 credit to Inventory would be required.

In a multi-step income statement,Operating income includes selling expenses,general expenses and other revenue and expense.

Both purchase discounts and sales discounts appear on the income statement of a company that uses the perpetual inventory method.

Beginning inventory is $42,000 and Ending inventory is $58,000.Cost of goods sold is $600,000.Calculate days in inventory.

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1. -Which of the following journal entries properly records this transaction?

The accounting cycle for a merchandising company begins with the purchase of inventory.

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received 20 days later?

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1. -Avery paid the supplier on February 9.Which of the following journal entries properly records this payment transaction?

Which of the following defines Gross profit?

What is a purchase return?

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

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000.Which of the following entries is needed to record the shrinkage?

The following pertains to periodic inventory: On a merchandising income statement,which would NOT be found under the heading of Cost of goods sold?

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

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

Which of the following is the gross profit percentage?

A company uses the perpetual inventory system.The inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $43,000.Which of the following would be included in the required adjusting entry?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 5: Merchandising Operations

In a multi-step income statement,Operating income includes selling expenses,general expenses and other revenue and expense.

Both purchase discounts and sales discounts appear on the income statement of a company that uses the perpetual inventory method.

Beginning inventory is $42,000 and Ending inventory is $58,000.Cost of goods sold is $600,000.Calculate days in inventory.

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1. -Which of the following journal entries properly records this transaction?

The accounting cycle for a merchandising company begins with the purchase of inventory.

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received 20 days later?

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1. -Avery paid the supplier on February 9.Which of the following journal entries properly records this payment transaction?

Which of the following defines Gross profit?

What is a purchase return?

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

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000.Which of the following entries is needed to record the shrinkage?

The following pertains to periodic inventory: On a merchandising income statement,which would NOT be found under the heading of Cost of goods sold?

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

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

Which of the following is the gross profit percentage?

A company uses the perpetual inventory system.The inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $43,000.Which of the following would be included in the required adjusting entry?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters