Question 1

Under the perpetual inventory system, which of the following accounts would not be used?

Accepted Answer

A)  Cost of Goods Sold 
B)  Merchandise Inventory 
C)  Sales 
D)  Purchases 
A)  Cost of Goods Sold 
B)  Merchandise Inventory 
C)  Sales 
D)  Purchases

Question 2

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)

Accepted Answer

A)  increase to Accounts Payable for $6,000. 
B)  increase to Purchases Discounts for $120. 
C)  decrease to Purchases for $6,000. 
D)  decrease to Accounts Payable for $5,880. 
A)  increase to Accounts Payable for $6,000. 
B)  increase to Purchases Discounts for $120. 
C)  decrease to Purchases for $6,000. 
D)  decrease to Accounts Payable for $5,880.

Question 3

Under the periodic inventory system, the return of goods to the supplier is recorded with a credit to Purchases Returns and Allowances.

Accepted Answer

A) True 
 B)False

Question 4

If creditors' payment terms are 60 days, financing period is 20 days, and it takes 30 days to collect the amount from customers. What time does it take to sell the inventory?

Accepted Answer

A)  60 days. 
B)  20 days. 
C)  30 days. 
D)  50 days. 
A)  60 days. 
B)  20 days. 
C)  30 days. 
D)  50 days.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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?

Accepted Answer

A)  $500 and $480 
B)  $480 and $500 
C)  $480 and $480 
D)  $500 and $500 
A)  $500 and $480 
B)  $480 and $500 
C)  $480 and $480 
D)  $500 and $500

Question 7

Compute the dollar amount of the items indicated by letters a through f in the table below.

Accepted Answer

a. $150
b. $4,900
c.

Question 8

Compute the dollar amount of each item indicated by a letter in the following table. Treat each horizontal row of numbers as a separate problem.

Accepted Answer

a. $60,000
g. $180,000
b. $85,

Question 9

Using the following information, calculate for 2010 (a) net sales, (b) beginning merchandise inventory, (c) gross margin, and (d) net income.

Accepted Answer

a. $88,800

Question 10

Feathertouch Company sold merchandize worth $800 on credit, terms n/15. The merchandize sold had cost $550. What is the required journal entry to record the transaction under the perpetual inventory system?

Accepted Answer

The answer of Feathertouch Company sold merchandize worth $800 on...

Question 11

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

Accepted Answer

The answer of Chancellor Company purchased merchandize worth $900 on...

Question 12

When freight-in is a relatively small amount, most companies include the cost in

Accepted Answer

A)  operating expenses. 
B)  cost of goods sold. 
C)  administrative expenses. 
D)  merchandise inventory. 
A)  operating expenses. 
B)  cost of goods sold. 
C)  administrative expenses. 
D)  merchandise inventory.

Question 13

Under the periodic inventory system, the Purchases account is used to accumulate all purchases of merchandise for resale.

Accepted Answer

A) True 
 B)False

Question 14

Under the periodic inventory system, the amount for inventory on hand is accurate only on the balance sheet date.

Accepted Answer

A) True 
 B)False

Question 15

Given the following information, prepare in good form the cost of goods sold section of an income statement for 2010.

Accepted Answer

The answer of Given the following information, prepare in good...

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Each of the following companies is a merchandising business except a

Accepted Answer

A)  candy store. 
B)  car wash. 
C)  wholesale parts company. 
D)  furniture store. 
A)  candy store. 
B)  car wash. 
C)  wholesale parts company. 
D)  furniture store.

Question 18

Service businesses can be classified as wholesalers and retailers.

Accepted Answer

A) True 
 B)False

Question 19

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?

Accepted Answer

The answer of Chancellor Company purchased merchandize worth $900 on...

Question 20

The last step in the operating cycle is the

Accepted Answer

A)  sale of merchandise inventory for cash or on credit. 
B)  payment for purchases made on credit. 
C)  collection of cash from credit sales. 
D)  purchase of merchandise inventory for cash or on credit. 
A)  sale of merchandise inventory for cash or on credit. 
B)  payment for purchases made on credit. 
C)  collection of cash from credit sales. 
D)  purchase of merchandise inventory for cash or on credit.

Exam 6: The Operating Cycle and Merchandising Operations

Under the perpetual inventory system, which of the following accounts would not be used?

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)

Under the periodic inventory system, the return of goods to the supplier is recorded with a credit to Purchases Returns and Allowances.

If creditors' payment terms are 60 days, financing period is 20 days, and it takes 30 days to collect the amount from customers. What time does it take to sell the inventory?

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

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?

Compute the dollar amount of the items indicated by letters a through f in the table below.

Compute the dollar amount of each item indicated by a letter in the following table. Treat each horizontal row of numbers as a separate problem.

Using the following information, calculate for 2010 (a) net sales, (b) beginning merchandise inventory, (c) gross margin, and (d) net income.

Feathertouch Company sold merchandize worth $800 on credit, terms n/15. The merchandize sold had cost $550. What is the required journal entry to record the transaction under the perpetual inventory system?

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

When freight-in is a relatively small amount, most companies include the cost in

Under the periodic inventory system, the Purchases account is used to accumulate all purchases of merchandise for resale.

Under the periodic inventory system, the amount for inventory on hand is accurate only on the balance sheet date.

Given the following information, prepare in good form the cost of goods sold section of an income statement for 2010.

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

Each of the following companies is a merchandising business except a

Service businesses can be classified as wholesalers and retailers.

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?

The last step in the operating cycle is the

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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