Question 1

A wholesaler is an intermediary that buys products from manufacturers or other wholesalers and sells them to consumers.

Accepted Answer

A) True 
 B)False

Question 2

ABC Corporation had total quick assets of $5,888,000,current assets of $11,700,000,and current liabilities of $8,000,000.Its acid-test ratio equals:

Accepted Answer

A) 0.50. 
B) 0.68. 
C) 0.74. 
D) 1.50. 
E) 2.20. 
A) 0.50. 
B) 0.68. 
C) 0.74. 
D) 1.50. 
E) 2.20.

Question 3

Home Brew Supplies Inc.uses the perpetual inventory method.Home Brew requested a price reduction from a vendor because the merchandise that was purchased did not meet specifications.The vendor sent Home Brew a credit memorandum for $2,300 to resolve the issue.How would Home Brew record this transaction?

Accepted Answer

A) Debit Cost of Goods Sold for $2,300 and credit Accounts Payable for $2,300. 
B) Debit Merchandise Inventory for $2,300 and credit Accounts Payable for $2,300. 
C) Debit Accounts Payable for $2,300 and credit Merchandise Inventory for $2,300. 
D) Debit Purchase Returns and Allowances for $2,300 and credit Accounts Payable for $2,300. 
E) Debit Accounts Payable for $2,300 and credit Purchase Returns and Allowances for $2,300. 
A) Debit Cost of Goods Sold for $2,300 and credit Accounts Payable for $2,300. 
B) Debit Merchandise Inventory for $2,300 and credit Accounts Payable for $2,300. 
C) Debit Accounts Payable for $2,300 and credit Merchandise Inventory for $2,300. 
D) Debit Purchase Returns and Allowances for $2,300 and credit Accounts Payable for $2,300. 
E) Debit Accounts Payable for $2,300 and credit Purchase Returns and Allowances for $2,300.

Question 4

Leighton Company uses the perpetual inventory method.On September 6,Loughton sold merchandise to Cray Company on terms of FOB shipping point.That same day,Loughton paid $700 cash for related shipping charges.How would Leighton record this payment?

Accepted Answer

A) Debit Merchandise Inventory for $700 and credit Cash for $700. 
B) Debit Delivery Expense for $700 and credit Cash for $700. 
C) Debit Accounts Receivable for $700 and credit Cash for $700. 
D) Debit Purchases for $700 and credit Cash for $700. 
E) Debit Cost of Goods Sold for $700 and credit Cash for $700. 
A) Debit Merchandise Inventory for $700 and credit Cash for $700. 
B) Debit Delivery Expense for $700 and credit Cash for $700. 
C) Debit Accounts Receivable for $700 and credit Cash for $700. 
D) Debit Purchases for $700 and credit Cash for $700. 
E) Debit Cost of Goods Sold for $700 and credit Cash for $700.

Question 5

A company has sales of $2,530,000,sales discounts of $200,000,sales returns and allowances of $323,000,shipping charges of $115,000,sales commissions of $234,000,net income of $863,500,and cost of goods sold of $1,012,000.What is the gross profit/margin for the period?

Accepted Answer

The answer of A company has sales of $2,530,000,sales discounts...

Question 6

From the adjusted trial balance for the Worker Products Company,prepare a multiple-step income statement in good form.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 7

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

Accepted Answer

A) True 
 B)False

Question 8

A company reported the following year-end information:
   Required:
a.Explain the purpose of the acid-test ratio.
b.Calculate the acid-test ratio for this company.
c.What does the acid-test ratio reveal about this company?

Accepted Answer

a.The acid-test ratio measures the abili

Question 9

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.

Accepted Answer

A) True 
 B)False

Question 10

When preparing the unadjusted trial balance in a periodic inventory system,the amount that appears as Merchandise Inventory is the ending inventory amount.

Accepted Answer

A) True 
 B)False

Question 11

If a company sells merchandise with credit terms 2/10,n/60,the credit period is 10 days and the discount period is 60 days.

Accepted Answer

A) True 
 B)False

Question 12

A company had sales of $375,000 and gross profit of $157,500.Its cost of goods sold was:

Accepted Answer

A) $(217,000). 
B) $375,000. 
C) $157,500. 
D) $217,500. 
E) $532,500. 
A) $(217,000). 
B) $375,000. 
C) $157,500. 
D) $217,500. 
E) $532,500.

Question 13

Merchandise inventory:

Accepted Answer

A) Is a long-term asset. 
B) Is a current asset. 
C) Includes supplies. 
D) Is classified with investments on the balance sheet. 
E) Must be sold within one month. 
A) Is a long-term asset. 
B) Is a current asset. 
C) Includes supplies. 
D) Is classified with investments on the balance sheet. 
E) Must be sold within one month.

Question 14

When a company has no reportable nonoperating activities,its income from operations is reported as ___________________.

Accepted Answer

The answer of When a company has no reportable nonoperating...

Question 15

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises: Periodic inventory system
Selling expenses
Perpetual inventory system
Credit memorandum
Credit period
Credit terms
Debit memorandum
Discount period
Gross profit
Sales discount

Accepted Answer

The Answer of Net sales less cost of goods sold. is...

Question 17

A company's current ratio is 1.2 and its quick ratio is 0.25.This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems.

Accepted Answer

A) True 
 B)False

Question 18

Steve's Skateboards uses the periodic inventory system and had the following sales transactions during April:
   Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 19

Steve's Skateboards uses the perpetual inventory system and had the following sales transactions during April:
   Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 20

With credit terms of 2/10,n/30,the seller is offering the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date.Otherwise,the full amount is due in 30 days.

Accepted Answer

A) True 
 B)False

A wholesaler is an intermediary that buys products from manufacturers or other wholesalers and sells them to consumers.

ABC Corporation had total quick assets of $5,888,000,current assets of $11,700,000,and current liabilities of $8,000,000.Its acid-test ratio equals:

Leighton Company uses the perpetual inventory method.On September 6,Loughton sold merchandise to Cray Company on terms of FOB shipping point.That same day,Loughton paid $700 cash for related shipping charges.How would Leighton record this payment?

A company has sales of $2,530,000,sales discounts of $200,000,sales returns and allowances of $323,000,shipping charges of $115,000,sales commissions of $234,000,net income of $863,500,and cost of goods sold of $1,012,000.What is the gross profit/margin for the period?

From the adjusted trial balance for the Worker Products Company,prepare a multiple-step income statement in good form.

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

A company reported the following year-end information: Required: a.Explain the purpose of the acid-test ratio. b.Calculate the acid-test ratio for this company. c.What does the acid-test ratio reveal about this company?

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.

When preparing the unadjusted trial balance in a periodic inventory system,the amount that appears as Merchandise Inventory is the ending inventory amount.

If a company sells merchandise with credit terms 2/10,n/60,the credit period is 10 days and the discount period is 60 days.

A company had sales of $375,000 and gross profit of $157,500.Its cost of goods sold was:

Merchandise inventory:

When a company has no reportable nonoperating activities,its income from operations is reported as ___________________.

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

A company's current ratio is 1.2 and its quick ratio is 0.25.This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems.

Steve's Skateboards uses the periodic inventory system and had the following sales transactions during April: Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Steve's Skateboards uses the perpetual inventory system and had the following sales transactions during April: Prepare the journal entries that Steve's Skateboards must make to record these transactions.

With credit terms of 2/10,n/30,the seller is offering the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date.Otherwise,the full amount is due in 30 days.

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

A wholesaler is an intermediary that buys products from manufacturers or other wholesalers and sells them to consumers.

ABC Corporation had total quick assets of $5,888,000,current assets of $11,700,000,and current liabilities of $8,000,000.Its acid-test ratio equals:

Leighton Company uses the perpetual inventory method.On September 6,Loughton sold merchandise to Cray Company on terms of FOB shipping point.That same day,Loughton paid $700 cash for related shipping charges.How would Leighton record this payment?

A company has sales of $2,530,000,sales discounts of $200,000,sales returns and allowances of $323,000,shipping charges of $115,000,sales commissions of $234,000,net income of $863,500,and cost of goods sold of $1,012,000.What is the gross profit/margin for the period?

From the adjusted trial balance for the Worker Products Company,prepare a multiple-step income statement in good form.

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

A company reported the following year-end information: Required: a.Explain the purpose of the acid-test ratio. b.Calculate the acid-test ratio for this company. c.What does the acid-test ratio reveal about this company?

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.

When preparing the unadjusted trial balance in a periodic inventory system,the amount that appears as Merchandise Inventory is the ending inventory amount.

If a company sells merchandise with credit terms 2/10,n/60,the credit period is 10 days and the discount period is 60 days.

A company had sales of $375,000 and gross profit of $157,500.Its cost of goods sold was:

Merchandise inventory:

When a company has no reportable nonoperating activities,its income from operations is reported as ___________________.

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

A company's current ratio is 1.2 and its quick ratio is 0.25.This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems.

Steve's Skateboards uses the periodic inventory system and had the following sales transactions during April: Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Steve's Skateboards uses the perpetual inventory system and had the following sales transactions during April: Prepare the journal entries that Steve's Skateboards must make to record these transactions.

With credit terms of 2/10,n/30,the seller is offering the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date.Otherwise,the full amount is due in 30 days.

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