Exam 5: The Operating Cycle and Merchandising Operations

Use this information to answer the following question. Account Name Debit Credit Sales 319,000 Sales Returns and Allowances 10,000 Purchases 68,000 Purchases Returns and Allowances 8,000 Freight-In 12,000 Selling Expenses 30,000 General and Administrative Expenses 110,000 In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Income before income taxes for the period was

Inventory losses are easier to identify under the perpetual inventory system than under the periodic inventory system.

Which of the following is not an internal control activity for cash?

Use this information to answer the following question. The selected accounts and balances for Keystone Market appear as follows: Advertising Expense 14,000 Common Stock 100,000 Dividends 21,000 Freight-In 7,000 Freight-Out Expense 10,000 Interest Income 24,000 Merchandise Inventory (Jan. 1) 58,000 Merchandise Inventory (Dec. 31) 56,000 Purchases 60,000 Purchases Returns and Allowances 4,000 Rent Expense 9,000 Retained Earnings 40,000 Sales 150,000 Sales Returns and Allowances 19,000 Wages Expense 32,000 Goods available for sale would appear on the income statement as

From the following data,calculate the amount of gross margin and gross purchases. Ending Merchandise Inventory \1 28 Purchases Returns and Allowances 32 Beginning Merchandise Inventory 160 Sales 1,280 Freight-In 96 Cost of Goods Sold 778 Purchases Disconuts 16

Adding together the ending merchandise inventory and cost of goods sold gives the amount of goods available for sale.

Goods totaling $28,000 purchased February 2 on terms of 2/10,n/30 and on which returns of $1,000 were made on February 10 would be subject to which of the following discounts if paid for on February 12?

Assuming that net cost of purchases was $58,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

The separation-of-duties feature of internal control can be negated when several employees are involved in a scheme.

When a business is able to deposit its credit card sales invoices directly into a special bank account,it debits Cash,not Accounts Receivable.

On August 1,Phillips Industries purchased $12,000 of merchandise on credit.Terms of 1/10,n/30 are extended,and Phillips makes payment on August 9. a. In the journal provided, make Phillips's entries, assuming use of the periodic inventory system. b. Make the entry that would have been made had payment been made on August 17.

The document prepared by a department requesting the company to buy something is called a(n)

If insured goods are shipped FOB destination,the seller should file a claim for goods damaged in transit.

When a company makes payment for goods or services,the check is prepared by the company's

When the periodic inventory system is used,a physical inventory should be taken at the end of the fiscal year.

Which of the following is not considered in computing net cost of purchases?

Prepare journal entries without explanations for the merchandising transactions listed below for Naveh Corporation.Assume use of the periodic inventory system.

Management is responsible for establishing a satisfactory system of internal control.

When a customer returns goods,the company decreases the Sales account.

Use this information to answer the following question. Account Name Debit Credit Sales 303,000 Sales Returns and Allowances 10,000 Purchases 68,000 Purchases Returns and Allowances 8,000 Freight-In 12,000 Selling Expenses 30,000 General and Administrative Expenses 110,000 In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Net sales for the period were