Exam 4: Reporting and Analyzing Merchandising Operations

How do closing entries for a merchandising company that uses the perpetual inventory system differ from the closing entries for a service company?

A company had sales of $350,000 and cost of goods sold of $200,000,which means gross profit is equal to $550,000.

The acid-test ratio reflects the ___________ of a company.

Ceres Computer Sales uses the perpetual inventory system and had the following transactions during the month of December: Required: Prepare the general journal entries to record these transactions.

The gross margin ratio reflects the relation between sales and cost of goods sold.

A company had net sales of $545,000 and cost of goods sold of $345,000,which means its gross margin is equal to $200,000.

In a periodic inventory system,cost of goods sold is recorded as each sale occurs.

Purchase discounts are the same as trade discounts.

The gross margin ratio is defined as gross margin divided by net sales.

A company purchased $1,800 of merchandise on December 5.On December 7,it returned $200 worth of merchandise.On December 8,it paid the balance in full,taking a 2% discount.The amount of the cash paid on December 8 is:

FOB _________________ means the buyer accepts ownership when the goods depart the seller's place of business.The buyer is responsible for paying shipping costs and bears the risk of damage or loss when goods are in transit.

Total Company has current liabilities in the amount of $1,250,000 and an acid test ratio of 3 and a current ratio of 7.What amount of quick assets does Total Company have on the balance sheet?