Exam 5: The Operating Cycle and Merchandising Operations

Each of the following is a feature of internal control except

Under the periodic inventory system,Cost of goods sold must be computed on the income statement because it is not updated for purchases,sales,and other transactions during the accounting period.

A physical inventory is usually taken

A retailer accepted Visa charge sales totaling $500 and deposited the charge slips in the bank.Assuming a credit card discount expense of 4 percent,what would be the increase to Cash and the increase to Sales,respectively?

The entry to record payment of a $1,500 purchase within the 2 percent discount period would include a(n)

Assume that the sales made by Wessling Corporation for the month ended February 28,20xx,were made to customers using credit cards and totaled $5,666.Prepare one journal entry to record these sales assuming that all of the credit card companies charge Wessling Corporation a 2.5 percent discount fee.(Omit date.)Round to the nearest whole dollar.

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) 70,000 Merchandise Inventory (Dec. 31) 56,000 Purchases 60,000 Purchases Returns and Allowances 4,000 Rent Expense 9,000 Retained Earnings 40,000 Sales 151,000 Sales Returns and Allowances 19,000 Wages Expense 32,000 Gross margin from sales would be

Freight-In is treated as a deduction in the cost of goods sold section of the income statement.

Which of the following companies would be most likely to use a computerized perpetual inventory system?

The difference between gross sales and net sales is equal to the sum of sales discounts and sales returns and allowances.

FOB shipping point means that the seller incurs the shipping costs.

Sale and purchase of goods should be recorded at their list price,less any trade discount involved.

Profitability management involves planning a business's cash receipts and cash payments.

Which of the following does not represent a sale?

A remittance advice is attached to a(n)

A consequence of a separation of duties is that

Use this information to answer the following question. Chupka Company experienced the following events during the period: 1. A tabulation of invaices at the end of the day showed \$80] in MasterCard invoices, which were deposited in a bank account at fall value less a 5 percent discaunt. 2. Made a sale an American Eagies5 card far 400 and mailed invoice to American Eagress for payment. The discount charged by American Bagges5 is 4 percent. The entry to record transaction 1 would include an increase in

An advantage of using the periodic inventory system is that it requires less recordkeeping than the perpetual inventory system.

Cash flow cannot be managed,but it is a natural component of business operations.

Chancellor Company purchased merchandize worth $900 on credit,terms n/30 and returned merchandize worth $100 on next day.What is the required journal entry to record the merchandize returns under the perpetual inventory system?