Exam 5: The Operating Cycle and Merchandising Operations

Given the following information,prepare in good form the cost of goods sold section of an income statement for 2010. Freight-In \ 24,000 Merchandise Inventory. December 31, 2009 90,000 Merchandise Inventory. December 31, 2010 102,000 Purchases 228,000 Purchases Returns and Allowances 8,400

A physical inventory is usually taken

On June 3,Win-Tel Company sold merchandize worth $800 on credit,terms 2/10,n/30.The merchandize sold had cost $550.The customer paid the amount on June 10. What is the required journal entry to record the payment received under the periodic inventory system?

A sale takes place when title to the goods transfers to the buyer.

Which of the following is not a primary concern of internal control?

A large discount chain,like Wal-Mart or Target,most likely would use the periodic inventory system to maintain control of its inventory.

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.

Before a check authorization is issued,the following documents must be in agreement,except for the

Indicate the letter of where each of the following documents would be prepared and the letter of where it would be sent. a. Requesting department b. Purchasing department c. Receiving department d. Accounting department e. Treasurer . Vendor

The net cost of purchases is found by deducting freight-in from net purchases.

Under the perpetual inventory system,the entry to record a purchase return would include a credit to which account?

Which of the following documents would not originate with the purchasing company?

Indicate whether each business practice listed below strengthens (S)or weakens (W)a company's system of internal control. _____ a. Bonding of employees _____ b. Limiting the number of people who have access to cash _____ c. Combining the recordkeeping and custodianship functions _____ d. Making all payments with cash _____ e. Keeping rotation of key employees to a minimum _____ _____ f. Using prenumbered sales tickets

Which of the following does not represent a sale?

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

The periodic inventory system is used most commonly by companies that sell

Sales Discounts and Sales Returns and Allowances are contra-revenue accounts.

A very small company would have the most difficulty in implementing which of the following internal control activities?

The entry to record a purchase of $6,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)