Question 1

A retailer is an intermediary that buys products from manufacturers and sells them to wholesalers.

Accepted Answer

A) True 
 B)False  False

Question 2

Vital Company had net income on this period's income statement in the amount of $624,240,other expense in the amount of $381,480 and a gross profit ratio of 58%,what was the amount of net sales on the income statement?

Accepted Answer

A) $1,836,000 
B) $ 1,076,276 
C) $1,734,000 
D) Can't be determined with the information given 
E) $1,005,720 
A) $1,836,000 
B) $ 1,076,276 
C) $1,734,000 
D) Can't be determined with the information given 
E) $1,005,720 C

Question 3

A company had sales of $350,000 and cost of goods sold of $200,000,which means gross profit is equal to $550,000.

Accepted Answer

A) True 
 B)False  False

Question 4

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

The answer of A ______________________ income statement includes cost of...

Question 5

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 6

Cost of goods sold is reported on both the income statement and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Match between columns
                        Premises:    Acid-test ratio 
   EOM 
   Merchandise inventory 
   Selling expenses 
   Multiple-step income statement 
   Inventory shrinkage 
   General and administrative expenses 
   Single-step income statement 
   FOB 
   List price

Accepted Answer

The Answer of  The abbreviation for free on board; is...

Question 8

The acid-test ratio:

Accepted Answer

A) Is also called the quick ratio 
B) Measures profitability 
C) Measures inventory turnover 
D) Is generally greater than the current ratio 
E) Is not used by merchandise companies 
A) Is also called the quick ratio 
B) Measures profitability 
C) Measures inventory turnover 
D) Is generally greater than the current ratio 
E) Is not used by merchandise companies

Question 9

The following information refers to Annie's Attic and its competitors in the antiques business.
 $$\begin{array} { | l | c | c | } 
\hline & \text { Current Ratio } & \text { Quick Ratio } \
\hline \text { Annuie's Attic } & 2.0 & 0.95 \
\hline \text { Bart's Basement } & 1.5 & 1.00 \
\hline \text { Chisolm's Collectibles } & 1.8 & 1.20 \
\hline \text { Martin's Marbles } & 1.9 & 0.80 \
\hline \text { Industry Average } & 2.0 & 1.00 \
\hline
\end{array}$$  
Required:
Comment on the relative liquidity positions of these companies.

Accepted Answer

Chisolm's Collectibles,Martin's Marbles

Question 10

A merchandising company:

Accepted Answer

A) Earns net income by buying and selling merchandise 
B) Receives fees only in exchange for services 
C) Earns profit from commissions only 
D) Earns profit from fares only 
E) Buys products from consumers 
A) Earns net income by buying and selling merchandise 
B) Receives fees only in exchange for services 
C) Earns profit from commissions only 
D) Earns profit from fares only 
E) Buys products from consumers

Question 11

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

Accepted Answer

A) Sales: $136,000; Gross Profit: $111,000 
B) Sales: $136,000; Gross Profit: $85,000 
C) Sales: $85,000; Gross Profit: $136,000 
D) Sales: $111,000; Gross Profit: $136,000 
E) Sales: $60,000; Gross Profit: $25,000 
A) Sales: $136,000; Gross Profit: $111,000 
B) Sales: $136,000; Gross Profit: $85,000 
C) Sales: $85,000; Gross Profit: $136,000 
D) Sales: $111,000; Gross Profit: $136,000 
E) Sales: $60,000; Gross Profit: $25,000

Question 12

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

Accepted Answer

A) Sales: $350,000; Gross Profit: $150,000 
B) Sales: $350,000; Gross Profit: $50,000 
C) Sales: $500,000; Gross Profit: $400,000 
D) Sales: $500,000; Gross Profit: $50,000 
E) Sales: $400,000; Gross Profit: $500,000 
A) Sales: $350,000; Gross Profit: $150,000 
B) Sales: $350,000; Gross Profit: $50,000 
C) Sales: $500,000; Gross Profit: $400,000 
D) Sales: $500,000; Gross Profit: $50,000 
E) Sales: $400,000; Gross Profit: $500,000

Question 13

A single-step income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

A) True 
 B)False

Question 14

The acid-test ratio reflects the ___________ of a company.

Accepted Answer

The answer of The acid-test ratio reflects the ___________ of...

Question 15

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.Alberts pays the invoice on October 8 and takes the appropriate discount.The journal entry that Robertson makes on October 8 is:

Accepted Answer

A) 
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) 
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$ 
C) 
$$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 3,920 & \
\hline \text { Sales discounts } & 80 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { |l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$ 
E) 
$$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Sales discounts } & 116 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$ 
A) 
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) 
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$ 
C) 
$$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 3,920 & \
\hline \text { Sales discounts } & 80 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { |l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$ 
E) 
$$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Sales discounts } & 116 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$

Question 16

A _______________________ is a document the buyer issues to inform the seller of a debit made to the seller's account in the buyer's records.

Accepted Answer

The answer of A _______________________ is a document the buyer...

Question 17

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:
 $\begin{array}{|l|l|l|}
\hline \text { June } & 10 & \begin{array}{l}
\text { Neutron purchased merchandise on credit from Proton for } \$ 9,000 \text {, terms } 2 / 10, \
\mathrm{n} / 30 . \text { FOB destination. Transportation costs of } \$ 350 \text { were paid by Proton. }
\end{array} \
\hline & 12 & \text { Neutron returned } \$ 600 \text { of merchandise from the June } 10 \text { purchase. } \
\hline & 19 & \text { Neutron paid Proton for the June } 10 \text { purchase. }\
\hline 
\end{array}$

Accepted Answer

\[\begin{array} { | l | l | l | r | r |

Question 18

The acid-test ratio is defined as current assets divided by current liabilities.

Accepted Answer

A) True 
 B)False

Question 19

Alpha Company had cash sales of $94,275,credit sales of $83,450,sales returns and allowances of $1,700 and sales discounts of $3,475.Alpha's net sales for this period equal:

Accepted Answer

A) $94,275 
B) $172,550 
C) $174,250 
D) $176,025 
E) $177,725 
A) $94,275 
B) $172,550 
C) $174,250 
D) $176,025 
E) $177,725

Question 20

A company has the following accounts.What is the acid test ratio?
$\begin{array}{c}
\begin{array}{lr}
\text { Cash } & \$ 10,000 \
\text { Accounts receivable } & 20,500 \
\text { Office supplies } & 2,625 \
\text { Land } & 37,153 \
\text { Office equipment } & 14,535 \
\text { Accounts payable } & 18,352 \
\text { Common stock } & 54,490
\end{array}
\begin{array}{lr}
\text { Wages Payable } & \$ 2,000 \
\text { Consulting fees } & 13,718 \
\text { earned } & \ 
\text { Rent expense } & 3,673 \
\text { Salaries expense } & 6,642  \
\text { Telephone expense } &560 \
\text { Miscellaneous } & 280 \
\text { expense } & 
\end{array}
\end{array}$

Accepted Answer

A) 4.50% 
B) 2.30% 
C) 1.75% 
D) 4.00% 
E) 1.50% 
A) 4.50% 
B) 2.30% 
C) 1.75% 
D) 4.00% 
E) 1.50%

A retailer is an intermediary that buys products from manufacturers and sells them to wholesalers.

Vital Company had net income on this period's income statement in the amount of $624,240,other expense in the amount of $381,480 and a gross profit ratio of 58%,what was the amount of net sales on the income statement?

A company had sales of $350,000 and cost of goods sold of $200,000,which means gross profit is equal to $550,000.

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Cost of goods sold is reported on both the income statement and the balance sheet.

The acid-test ratio:

A merchandising company:

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

A single-step income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

The acid-test ratio reflects the ___________ of a company.

A _______________________ is a document the buyer issues to inform the seller of a debit made to the seller's account in the buyer's records.

The acid-test ratio is defined as current assets divided by current liabilities.

Alpha Company had cash sales of $94,275,credit sales of $83,450,sales returns and allowances of $1,700 and sales discounts of $3,475.Alpha's net sales for this period equal:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 4: Reporting and Analyzing Merchandising Operations

A retailer is an intermediary that buys products from manufacturers and sells them to wholesalers.

Vital Company had net income on this period's income statement in the amount of $624,240,other expense in the amount of $381,480 and a gross profit ratio of 58%,what was the amount of net sales on the income statement?

A company had sales of $350,000 and cost of goods sold of $200,000,which means gross profit is equal to $550,000.

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Cost of goods sold is reported on both the income statement and the balance sheet.

The acid-test ratio:

A merchandising company:

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

A single-step income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

The acid-test ratio reflects the ___________ of a company.

A _______________________ is a document the buyer issues to inform the seller of a debit made to the seller's account in the buyer's records.

The acid-test ratio is defined as current assets divided by current liabilities.

Alpha Company had cash sales of $94,275,credit sales of $83,450,sales returns and allowances of $1,700 and sales discounts of $3,475.Alpha's net sales for this period equal:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters