Exam 5: Merchandising Operations

A merchandiser uses a perpetual inventory system.The beginning Owner,Capital balance of the merchandiser was $120,000.During the year,Sales Revenue amounted to $80,000,Cost of Goods Sold was $45,000,and all other expenses totaled $12,000.Owner withdrawals were $27,000.There were no new capital contributions during the year.The ending balance of Owner,Capital would be ________.

The Merchandise Inventory account should stay current at all times in a perpetual inventory system.

Credit terms of 2/10,n/30 indicate that a discount of 2% will be given if payment is made within 10 days of the invoice date.Otherwise,the total invoice amount is due within 30 days of the invoice date.

Extreme Discount Merchandisers has purchased merchandise on account and paid $450 for freight in.Prepare the journal entry for freight paid.(Assume a perpetual inventory system.)

On a balance sheet for a merchandiser,Merchandise Inventory is listed as a(n)________.

Which of the following is TRUE of the gross profit percentage?

The entry to close Sales Discounts Forfeited will include a debit to Income Summary.

Under the perpetual inventory system,when a wholesaler returns the goods purchased on account,the ________ account is credited.

An invoice,with payment terms of 5/10,n/30,was issued on April 28 for $250.00.If the payment was made on May 12,the amount of payment will be ________.(Round your answer to the nearest cent.)

Under the new revenue recognition standard,companies should only record sales revenue in the amount they expect to eventually realize.

The Merchandise Inventory account is an asset account that is used only for goods purchased that the business owns and intends to resell to customers.

Forever Jewelers uses the perpetual inventory system.On April 2,Forever sold merchandise with a cost of $1,500 for $6,000 to a customer on account with terms of 1/15,n/30.Which of the following journal entries correctly records the sales revenue?

In a periodic inventory system,the "cash register" at the store is a computer terminal that records sales and updates inventory records.

Journalize the following purchase transactions for Main Street Office Supplies using the periodic inventory system.Explanations are not required. Main Street buys \ 167,500 worth of merchandise May 12 inventory on account with credit terms of 2/10, n/30. May 16 Main Street returns \ 18,600 of the merchandise to the vendor due to damage during shipment. May 21 Main Street pays the amount due.

Merchandise Inventory and Cost of Goods Sold appear ________.

Abe's Printing Supply Company uses a perpetual inventory system.The company had the following transactions during August 2019: Aug.5: Purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60. Aug.9: Paid transportation costs of $440 for the Aug.5 purchase. Aug.10: Returned $600 of defective merchandise that had been purchased on Aug.5. Aug.15: Paid for the merchandise purchased on Aug.5. Prepare journal entries for August 10 and 15.Omit explanations.

The gross profit percentage measures the profitability of each sales dollar above the cost of goods sold.

A wholesaler is a merchandiser who buys goods from a manufacturer and then sells the goods to retailers.

Under the new revenue recognition standards,companies recognize revenue when performance obligations associated with contracts are identified.

If goods are sold on terms FOB shipping point,the ________.