Question 1

If a merchandiser uses the periodic inventory system,it is necessary to conduct a physical count of inventory to determine the quantity of inventory on hand.

Accepted Answer

A) True 
 B)False

Question 2

Weston Jewelers uses the perpetual inventory system.On April 2,Weston sold merchandise with a cost of $5,565 for $9,739 to a customer on account with the terms 3/15,n/30.Weston paid $150 for delivery of the merchandise.Calculate the amount of net sales revenue.(Round your any intermediary calculations and your final answer to the nearest dollar.)

Accepted Answer

A)  $9,889 
B)  $9,739 
C)  $9,447 
D)  $5,565 
A)  $9,889 
B)  $9,739 
C)  $9,447 
D)  $5,565

Question 3

On a multi-step income statement,Sales Discounts Forfeited is reported as part of operating income.

Accepted Answer

A) True 
 B)False

Question 4

The net cost of inventory purchased equals the purchase cost less purchase returns and allowances less purchase discounts.

Accepted Answer

A) True 
 B)False

Question 5

Under the perpetual inventory system,when a purchaser makes payment within the discount period,the amount of discount will be credited to the Merchandise Inventory account.

Accepted Answer

A) True 
 B)False

Question 6

In a periodic inventory system,purchases,purchase discounts,and purchase returns and allowances are recorded in the Merchandise Inventory account as and when they occur.

Accepted Answer

A) True 
 B)False

Question 7

When a sale is made on account,Accounts Receivable is debited.

Accepted Answer

A) True 
 B)False

Question 8

When using the periodic inventory system,the process of recording the ending Merchandise Inventory is completed by making an adjusting entry.

Accepted Answer

A) True 
 B)False

Question 9

On the balance sheet of a retailer,the Merchandise Inventory account ________.

Accepted Answer

A)  is not included because it is an income statement account 
B)  is included in the current assets section 
C)  is listed after prepaid assets 
D)  represents the value of inventory that has been sold during the period 
A)  is not included because it is an income statement account 
B)  is included in the current assets section 
C)  is listed after prepaid assets 
D)  represents the value of inventory that has been sold during the period

Question 10

Regarding the Cost of Goods Sold account,which of the following statements is incorrect?

Accepted Answer

A)  In a perpetual inventory system, the Cost of Goods Sold account keeps a current balance throughout the period. 
B)  Cost of Goods sold is a contra revenue account. 
C)  Cost of Goods Sold is based on the company's cost, not the retail price. 
D)  Cost of Goods Sold represents the cost of inventory that has been sold to customers. 
A)  In a perpetual inventory system, the Cost of Goods Sold account keeps a current balance throughout the period. 
B)  Cost of Goods sold is a contra revenue account. 
C)  Cost of Goods Sold is based on the company's cost, not the retail price. 
D)  Cost of Goods Sold represents the cost of inventory that has been sold to customers.

Question 11

Merchandise inventory accounting systems can be broadly categorized into two types.They are ________.

Accepted Answer

A)  FIFO and LIFO 
B)  perpetual and periodic 
C)  wholesale and retail 
D)  manufacturer and producer 
A)  FIFO and LIFO 
B)  perpetual and periodic 
C)  wholesale and retail 
D)  manufacturer and producer

Question 12

A merchandiser uses a perpetual inventory system.The third step in the process of closing the accounts of a merchandiser is to ________.

Accepted Answer

A)  make the revenue accounts equal to zero via the Income Summary account 
B)  make the Income Summary account equal to zero via the Owner, Withdrawals account 
C)  make the expense accounts equal to zero via the Income Summary account 
D)  make the Income Summary account equal to zero via the Owner, Capital account 
A)  make the revenue accounts equal to zero via the Income Summary account 
B)  make the Income Summary account equal to zero via the Owner, Withdrawals account 
C)  make the expense accounts equal to zero via the Income Summary account 
D)  make the Income Summary account equal to zero via the Owner, Capital account

Question 13

In a periodic inventory system,merchandise inventory and purchasing systems are integrated with the records for Accounts Receivable and Sales Revenue.

Accepted Answer

A) True 
 B)False

Question 14

In a periodic inventory system,there is no need to record an entry to Merchandise Inventory and Cost of Goods Sold when a sale occurs.

Accepted Answer

A) True 
 B)False

Question 15

A merchandiser uses a perpetual inventory system.The beginning Owner,Capital balance of the merchandiser was $99,000.During the year,Sales Revenue amounted to $75,000,Cost of Goods Sold was $32,000,and all other expenses totaled $10,000.Owner withdrawals were $21,000.There were no new capital contributions during the year.The last step in the closing process would include ________.

Accepted Answer

A)  a debit to Income Summary for $33,000 
B)  a credit to Income Summary for $21,000 
C)  a debit to the Owner, Capital account for $33,000 
D)  a debit to the Owner, Capital account for $21,000 
A)  a debit to Income Summary for $33,000 
B)  a credit to Income Summary for $21,000 
C)  a debit to the Owner, Capital account for $33,000 
D)  a debit to the Owner, Capital account for $21,000

Question 16

The terms of an invoice are 3/10,n/25.This means that a ________ of the invoice date.

Accepted Answer

A)  discount of 10 percent is allowed if the invoice is paid within three days after the invoice date 
B)  discount of 3 percent is allowed if the invoice is paid within 10 days after the invoice date 
C)  discount of 25 percent is allowed if the invoice is paid within 10 days after the invoice date 
D)  discount of 3 percent is allowed if the invoice is paid after 25 days after the invoice date 
A)  discount of 10 percent is allowed if the invoice is paid within three days after the invoice date 
B)  discount of 3 percent is allowed if the invoice is paid within 10 days after the invoice date 
C)  discount of 25 percent is allowed if the invoice is paid within 10 days after the invoice date 
D)  discount of 3 percent is allowed if the invoice is paid after 25 days after the invoice date

Question 17

A merchandiser reports sales revenue of $24,000 and sales discounts forfeited of $1,440.The merchandiser uses a perpetual inventory system.The first entry in the closing process would include ________.

Accepted Answer

A)  a credit to Income Summary for $25,440 
B)  a credit to Income Summary for $24,000 
C)  a debit to Income Summary for $25,440 
D)  a debit to Income Summary for $24,000 
A)  a credit to Income Summary for $25,440 
B)  a credit to Income Summary for $24,000 
C)  a debit to Income Summary for $25,440 
D)  a debit to Income Summary for $24,000

Exam 5: Merchandising Operations

If a merchandiser uses the periodic inventory system,it is necessary to conduct a physical count of inventory to determine the quantity of inventory on hand.

On a multi-step income statement,Sales Discounts Forfeited is reported as part of operating income.

The net cost of inventory purchased equals the purchase cost less purchase returns and allowances less purchase discounts.

Under the perpetual inventory system,when a purchaser makes payment within the discount period,the amount of discount will be credited to the Merchandise Inventory account.

In a periodic inventory system,purchases,purchase discounts,and purchase returns and allowances are recorded in the Merchandise Inventory account as and when they occur.

When a sale is made on account,Accounts Receivable is debited.

When using the periodic inventory system,the process of recording the ending Merchandise Inventory is completed by making an adjusting entry.

On the balance sheet of a retailer,the Merchandise Inventory account ________.

Regarding the Cost of Goods Sold account,which of the following statements is incorrect?

Merchandise inventory accounting systems can be broadly categorized into two types.They are ________.

A merchandiser uses a perpetual inventory system.The third step in the process of closing the accounts of a merchandiser is to ________.

In a periodic inventory system,merchandise inventory and purchasing systems are integrated with the records for Accounts Receivable and Sales Revenue.

In a periodic inventory system,there is no need to record an entry to Merchandise Inventory and Cost of Goods Sold when a sale occurs.

The terms of an invoice are 3/10,n/25.This means that a ________ of the invoice date.

A merchandiser reports sales revenue of $24,000 and sales discounts forfeited of $1,440.The merchandiser uses a perpetual inventory system.The first entry in the closing process would include ________.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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