Question 1

Trade discounts are recorded in a Trade Discounts account in the accounting system.

Accepted Answer

A) True 
 B)False  False

Question 2

Quick assets are defined as:

Accepted Answer

A) Cash,short-term investments,and inventory. 
B) Cash,short-term investments,and current receivables. 
C) Cash,inventory,and current receivables. 
D) Cash,noncurrent receivables,and prepaid expenses. 
E) Accounts receivable,inventory,and prepaid expenses. 
A) Cash,short-term investments,and inventory. 
B) Cash,short-term investments,and current receivables. 
C) Cash,inventory,and current receivables. 
D) Cash,noncurrent receivables,and prepaid expenses. 
E) Accounts receivable,inventory,and prepaid expenses. B

Question 3

A service company earns net income by buying and selling merchandise.

Accepted Answer

A) True 
 B)False  False

Question 4

______________________ are nonoperating activities that include interest expense,losses from asset disposals,and casualty losses.

Accepted Answer

Other expe

Question 5

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

Accepted Answer

A) True 
 B)False

Question 6

A company reported the following information for the month of November:
   Required: Calculate this company's gross margin ratio.

Accepted Answer

@#IMG-DLM&_TB6947_00_TB6947_00

Question 7

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business.The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

Accepted Answer

The answer of FOB _________________ means ownership of goods transfers...

Question 8

What are the differences between the periodic and the perpetual inventory systems?

Accepted Answer

Under a perpetual system each purchase,p

Question 9

The profit margin ratio is gross margin divided by total assets.

Accepted Answer

A) True 
 B)False

Question 10

From the adjusted trial balance for Worker Products,prepare the necessary closing entries.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 11

Assets tied up in inventory are referred to as nonproductive assets.

Accepted Answer

A) True 
 B)False

Question 12

Explain the difference between the single-step and multiple-step income statements.

Accepted Answer

A single-step income statement format in

Question 13

The periodic inventory system requires updating the inventory account only at the end of the period to reflect the quantity and cost of both the goods available and the goods sold.

Accepted Answer

A) True 
 B)False

Question 14

What is inventory shrinkage? How do managers account for shrinkage?

Accepted Answer

Inventory shrinkage is the los

Question 15

A company had expenses other than cost of goods sold of $175,000.Determine sales and gross profit given cost of goods sold was $622,000 and net loss was ($41,000).

Accepted Answer

A) Sales: $838,000: gross profit: $216,000 
B) Sales: $756,000: gross profit: $134,000 
C) Sales: $797,000: gross profit: $756,000 
D) Sales: $756,000: gross profit: $797,000 
E) Sales: $134,000: gross profit: $216,000 
A) Sales: $838,000: gross profit: $216,000 
B) Sales: $756,000: gross profit: $134,000 
C) Sales: $797,000: gross profit: $756,000 
D) Sales: $756,000: gross profit: $797,000 
E) Sales: $134,000: gross profit: $216,000

Question 16

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.The journal entry or entries that Robertson will make on October 1 is:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 17

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

Accepted Answer

A) Balanced income statement. 
B) Single-step income statement. 
C) Multiple-step income statement. 
D) Combined income statement. 
E) Simplified income statement. 
A) Balanced income statement. 
B) Single-step income statement. 
C) Multiple-step income statement. 
D) Combined income statement. 
E) Simplified income statement.

Question 18

Olivieri Company uses the perpetual inventory method.On January 5,Olivieri sold merchandise to Sulo Inc.for $10,000 under credit terms of 2/10,n/30,FOB destination.The merchandise had cost $7,500.How would the company record this transaction?

Accepted Answer

A) Debit Accounts Receivable for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500. 
B) Debit Cash for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500. 
C) Debit Accounts Receivable for $10,000 and credit Sales for $10,000. 
D) Debit Accounts Receivable for $10,000,debit Cost of Goods Sold for $7,500,and credit Gross Margin for $7,500. 
E) Debit Accounts Receivable for $9,800,credit Sales for $9,800,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500. 
A) Debit Accounts Receivable for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500. 
B) Debit Cash for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500. 
C) Debit Accounts Receivable for $10,000 and credit Sales for $10,000. 
D) Debit Accounts Receivable for $10,000,debit Cost of Goods Sold for $7,500,and credit Gross Margin for $7,500. 
E) Debit Accounts Receivable for $9,800,credit Sales for $9,800,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.

Question 19

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.Alberts pays the invoice on October 8 and takes the appropriate discount.The journal entry that Robertson makes on October 8 is:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 20

Prepare journal entries to record the following merchandising transactions of Easterly Company,which applies the periodic inventory system.Explanations are not required.

Accepted Answer

@#IMG-DLM&_TB6947_00

Trade discounts are recorded in a Trade Discounts account in the accounting system.

Quick assets are defined as:

A service company earns net income by buying and selling merchandise.

______________________ are nonoperating activities that include interest expense,losses from asset disposals,and casualty losses.

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

A company reported the following information for the month of November: Required: Calculate this company's gross margin ratio.

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business.The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

What are the differences between the periodic and the perpetual inventory systems?

The profit margin ratio is gross margin divided by total assets.

From the adjusted trial balance for Worker Products,prepare the necessary closing entries.

Assets tied up in inventory are referred to as nonproductive assets.

Explain the difference between the single-step and multiple-step income statements.

The periodic inventory system requires updating the inventory account only at the end of the period to reflect the quantity and cost of both the goods available and the goods sold.

What is inventory shrinkage? How do managers account for shrinkage?

A company had expenses other than cost of goods sold of $175,000.Determine sales and gross profit given cost of goods sold was $622,000 and net loss was ($41,000).

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.The journal entry or entries that Robertson will make on October 1 is:

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

Olivieri Company uses the perpetual inventory method.On January 5,Olivieri sold merchandise to Sulo Inc.for $10,000 under credit terms of 2/10,n/30,FOB destination.The merchandise had cost $7,500.How would the company record this transaction?

Prepare journal entries to record the following merchandising transactions of Easterly Company,which applies the periodic inventory system.Explanations are not required.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 4: Reporting and Analyzing Merchandising Operations

Trade discounts are recorded in a Trade Discounts account in the accounting system.

Quick assets are defined as:

A service company earns net income by buying and selling merchandise.

______________________ are nonoperating activities that include interest expense,losses from asset disposals,and casualty losses.

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

A company reported the following information for the month of November: Required: Calculate this company's gross margin ratio.

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business.The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

What are the differences between the periodic and the perpetual inventory systems?

The profit margin ratio is gross margin divided by total assets.

From the adjusted trial balance for Worker Products,prepare the necessary closing entries.

Assets tied up in inventory are referred to as nonproductive assets.

Explain the difference between the single-step and multiple-step income statements.

The periodic inventory system requires updating the inventory account only at the end of the period to reflect the quantity and cost of both the goods available and the goods sold.

What is inventory shrinkage? How do managers account for shrinkage?

A company had expenses other than cost of goods sold of $175,000.Determine sales and gross profit given cost of goods sold was $622,000 and net loss was ($41,000).

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.The journal entry or entries that Robertson will make on October 1 is:

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

Olivieri Company uses the perpetual inventory method.On January 5,Olivieri sold merchandise to Sulo Inc.for $10,000 under credit terms of 2/10,n/30,FOB destination.The merchandise had cost $7,500.How would the company record this transaction?

Prepare journal entries to record the following merchandising transactions of Easterly Company,which applies the periodic inventory system.Explanations are not required.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters