Question 1

Each sales transaction of a seller that uses a perpetual system involves recognizing both revenue and cost of merchandise sold.

Accepted Answer

A) True 
 B)False

Question 2

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

Accepted Answer

The answer of A ___________ inventory system updates the accounting...

Question 3

Harriet's Toy Shop had net sales of $852,000.The gross profit was $230,000.Calculate Harriet's cost of goods sold.

Accepted Answer

$852,000 -

Question 4

Describe the difference between wholesalers and retailers.

Accepted Answer

A wholesaler is an intermediary that buy

Question 5

___________ expenses are those expenses that support a company's overall operations and include expenses related to accounting,human resource management,and financial management.

Accepted Answer

General an

Question 6

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Accepted Answer

A) True 
 B)False

Question 7

A company's current assets were $17,980,its quick assets were $11,420,and its current liabilities were $12,190.Its quick ratio equals:

Accepted Answer

A) 0.94. 
B) 1.07. 
C) 1.48. 
D) 1.57. 
E) 2.40. 
A) 0.94. 
B) 1.07. 
C) 1.48. 
D) 1.57. 
E) 2.40.

Question 8

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income totaled $263,500,and cost of goods sold of $420,000.What is the net sales amount for the period?

Accepted Answer

A) $1,500,000 
B) $1,275,000 
C) $1,725,000 
D) $1,521,000 
E) $1,479,000 
A) $1,500,000 
B) $1,275,000 
C) $1,725,000 
D) $1,521,000 
E) $1,479,000

Question 9

Under the perpetual inventory system,the cost of merchandise purchased is accumulated in the Merchandise Inventory account.

Accepted Answer

A) True 
 B)False

Question 10

Liquidity problems are likely to exist when a company's acid-test ratio is:

Accepted Answer

A) Less than the current ratio. 
B) 1 to 1. 
C) Higher than 1 to 1. 
D) Substantially lower than 1 to 1. 
E) Higher than the current ratio. 
A) Less than the current ratio. 
B) 1 to 1. 
C) Higher than 1 to 1. 
D) Substantially lower than 1 to 1. 
E) Higher than the current ratio.

Question 11

Eck Company uses the perpetual inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Eck paid $750 cash for the shipping charges.How would the company record this transaction?

Accepted Answer

A) Debit Merchandise Inventory for $750 and credit Cash for $750. 
B) Debit Transportation-In for $750 and credit Cash for $750. 
C) Debit Merchandise Inventory for $750 and credit Accounts Payable for $750. 
D) Debit Transportation-In for $750 and credit Accounts Payable for $750. 
E) Debit Delivery Expense for $750 and credit Cash for $750. 
A) Debit Merchandise Inventory for $750 and credit Cash for $750. 
B) Debit Transportation-In for $750 and credit Cash for $750. 
C) Debit Merchandise Inventory for $750 and credit Accounts Payable for $750. 
D) Debit Transportation-In for $750 and credit Accounts Payable for $750. 
E) Debit Delivery Expense for $750 and credit Cash for $750.

Question 12

Sales Discounts,Sales Returns and Allowances,and Cost of Goods Sold are all closed to the Income Summary account with debits.

Accepted Answer

A) True 
 B)False

Question 13

Beginning inventory plus the net cost of purchases is the _____________________.

Accepted Answer

goods avai

Question 14

A company's net sales were $676,600,its cost of goods sold was $236,810,and its net income was $33,750.Its gross margin ratio equals:

Accepted Answer

A) 5%. 
B) 9.6%. 
C) 35%. 
D) 65%. 
E) 285.7%. 
A) 5%. 
B) 9.6%. 
C) 35%. 
D) 65%. 
E) 285.7%.

Question 15

A company had net sales of $340,500,its cost of goods sold was $257,000,and its net income was $13,750.The company's gross margin ratio equals 24.5%.

Accepted Answer

A) True 
 B)False

Question 16

Fulton Company uses the periodic inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Fulton paid $750 cash for the shipping charges.How would the company record this transaction?

Accepted Answer

A) Debit Merchandise Inventory for $750 and credit Cash for $750. 
B) Debit Transportation-In for $750 and credit Cash for $750. 
C) Debit Merchandise Inventory for $750 and credit Accounts Payable for $750. 
D) Debit Transportation-In for $750 and credit Accounts Payable for $750. 
E) Debit Delivery Expense for $750 and credit Cash for $750. 
A) Debit Merchandise Inventory for $750 and credit Cash for $750. 
B) Debit Transportation-In for $750 and credit Cash for $750. 
C) Debit Merchandise Inventory for $750 and credit Accounts Payable for $750. 
D) Debit Transportation-In for $750 and credit Accounts Payable for $750. 
E) Debit Delivery Expense for $750 and credit Cash for $750.

Question 17

Sales returns:

Accepted Answer

A) Refer to merchandise that customers return to the seller after the sale. 
B) Refer to reductions in the selling price of merchandise sold to customers. 
C) Represent cash discounts. 
D) Represent trade discounts. 
E) Are not recorded under the perpetual inventory system until the end of each accounting period. 
A) Refer to merchandise that customers return to the seller after the sale. 
B) Refer to reductions in the selling price of merchandise sold to customers. 
C) Represent cash discounts. 
D) Represent trade discounts. 
E) Are not recorded under the perpetual inventory system until the end of each accounting period.

Question 18

Beginning merchandise inventory plus the net cost of purchases is equal to the merchandise available for sale.

Accepted Answer

A) True 
 B)False

Question 19

What does FOB stand for? Differentiate between FOB shipping point (or FOB factory) and FOB destination?

Accepted Answer

FOB stands for free on board.If goods ar

Question 20

Generally accepted accounting principles require companies to use a specific format for the financial statements.

Accepted Answer

A) True 
 B)False

Each sales transaction of a seller that uses a perpetual system involves recognizing both revenue and cost of merchandise sold.

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

Harriet's Toy Shop had net sales of $852,000.The gross profit was $230,000.Calculate Harriet's cost of goods sold.

Describe the difference between wholesalers and retailers.

___________ expenses are those expenses that support a company's overall operations and include expenses related to accounting,human resource management,and financial management.

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

A company's current assets were $17,980,its quick assets were $11,420,and its current liabilities were $12,190.Its quick ratio equals:

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income totaled $263,500,and cost of goods sold of $420,000.What is the net sales amount for the period?

Under the perpetual inventory system,the cost of merchandise purchased is accumulated in the Merchandise Inventory account.

Liquidity problems are likely to exist when a company's acid-test ratio is:

Eck Company uses the perpetual inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Eck paid $750 cash for the shipping charges.How would the company record this transaction?

Sales Discounts,Sales Returns and Allowances,and Cost of Goods Sold are all closed to the Income Summary account with debits.

Beginning inventory plus the net cost of purchases is the _____________________.

A company's net sales were $676,600,its cost of goods sold was $236,810,and its net income was $33,750.Its gross margin ratio equals:

A company had net sales of $340,500,its cost of goods sold was $257,000,and its net income was $13,750.The company's gross margin ratio equals 24.5%.

Fulton Company uses the periodic inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Fulton paid $750 cash for the shipping charges.How would the company record this transaction?

Sales returns:

Beginning merchandise inventory plus the net cost of purchases is equal to the merchandise available for sale.

What does FOB stand for? Differentiate between FOB shipping point (or FOB factory) and FOB destination?

Generally accepted accounting principles require companies to use a specific format for the financial statements.

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

Each sales transaction of a seller that uses a perpetual system involves recognizing both revenue and cost of merchandise sold.

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

Harriet's Toy Shop had net sales of $852,000.The gross profit was $230,000.Calculate Harriet's cost of goods sold.

Describe the difference between wholesalers and retailers.

___________ expenses are those expenses that support a company's overall operations and include expenses related to accounting,human resource management,and financial management.

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

A company's current assets were $17,980,its quick assets were $11,420,and its current liabilities were $12,190.Its quick ratio equals:

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income totaled $263,500,and cost of goods sold of $420,000.What is the net sales amount for the period?

Under the perpetual inventory system,the cost of merchandise purchased is accumulated in the Merchandise Inventory account.

Liquidity problems are likely to exist when a company's acid-test ratio is:

Eck Company uses the perpetual inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Eck paid $750 cash for the shipping charges.How would the company record this transaction?

Sales Discounts,Sales Returns and Allowances,and Cost of Goods Sold are all closed to the Income Summary account with debits.

Beginning inventory plus the net cost of purchases is the _____________________.

A company's net sales were $676,600,its cost of goods sold was $236,810,and its net income was $33,750.Its gross margin ratio equals:

A company had net sales of $340,500,its cost of goods sold was $257,000,and its net income was $13,750.The company's gross margin ratio equals 24.5%.

Fulton Company uses the periodic inventory method.On April 15,Carlton Company purchased merchandise inventory on terms of FOB destination.When the merchandise was delivered,Fulton paid $750 cash for the shipping charges.How would the company record this transaction?

Sales returns:

Beginning merchandise inventory plus the net cost of purchases is equal to the merchandise available for sale.

What does FOB stand for? Differentiate between FOB shipping point (or FOB factory) and FOB destination?

Generally accepted accounting principles require companies to use a specific format for the financial statements.

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