Exam 5: The Operating Cycle and Merchandising Operations

In a small business,because it is often cost-prohibitive to hire extra employees,the lack of certain separations of duties can best be overcome by

Terms of "2/10,n/30" are an example of a trade discount.

Assume that on July 24,20xx,Bond Company had a sale totaling $11,019 with a related cost of goods sold of $7,604.Record this transaction in journal form assuming the perpetual inventory system was in use.

When the terms of sale include a sales discount,it usually is advisable for the buyer to pay within the discount period.

The fee paid by a retailer to a credit card company is considered a contra-revenue account by the retailer.

Which of the following activities is not a component of the operating cycle?

The use of major credit cards requires sellers to establish the customer's credit.

A purchase order is sent from a company's

Merchandise inventory becomes part of cost of goods sold when a company

Feathertouch Company sold merchandize worth $800 on credit,terms n/15 and on the next day the customer returned merchandize worth $50,which cost $30 for Feathertouch company.What is the required journal entry to record the merchandize returns under the perpetual inventory system?

Effective internal control requires a department to purchase supplies on its own.

Khan Products,Inc.,entered into the transactions listed below.In the journal provided,prepare Khan's journal entries,assuming use of the periodic inventory system.Omit explanations.

Which of the following is an appropriate internal control activity for cash?

A sale on March 21 with terms of n/10 eom is due to be collected by

Which of the following goods would not be included in merchandise inventory for a purchasing company?

When the buyer bears the transportation charge,it is called freight-out.

A merchandising business will earn an income before income taxes of exactly $0 when