Question 1

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

Accepted Answer

The answer of A merchandising company's ___________ begins with the...

Question 2

A company purchased $1,500 of merchandise on credit with terms 3/15, n/30. How much will be debited to Accounts Payable if the company pays $485 cash on this account within ten days?

Accepted Answer

A)  $485 
B)  $500 
C)  Nothing will debited to Accounts Payable, the account should be credited in this situation 
D)  $470.45 
E)  $1,455 
A)  $485 
B)  $500 
C)  Nothing will debited to Accounts Payable, the account should be credited in this situation 
D)  $470.45 
E)  $1,455

Question 3

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Accepted Answer

A) True 
 B)False

Question 4

Gross profit is the same as gross margin.

Accepted Answer

A) True 
 B)False

Question 5

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 perpetual inventory system. The journal entry or entries that Robertson will make on October 1 is:

Accepted Answer

A) $\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) $\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$ 
C) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$ 
D) $\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$ 
E) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 4,000 & \
\hline \text { Sales } & & 4,000 \
\hline
\end{array}$ 
A) $\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) $\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$ 
C) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$ 
D) $\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$ 
E) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 4,000 & \
\hline \text { Sales } & & 4,000 \
\hline
\end{array}$

Question 6

A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals:

Accepted Answer

A)  $200 
B)  $1,564 
C)  $1,568 
D)  $1,600 
E)  $1,800 
A)  $200 
B)  $1,564 
C)  $1,568 
D)  $1,600 
E)  $1,800

Question 7

The following information refers to Annie's Attic and its competitors in the antiques business.
 
Required:
Comment on the relative liquidity positions of these companies.

Accepted Answer

Chisolm's Collectibles, Martin's Marbles

Question 8

Identify and explain the key components of income for a merchandising company.

Accepted Answer

The basic components of income begin wit

Question 9

In a perpetual inventory system, the merchandise inventory account must be closed at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 10

Describe the key attributes of inventory for a merchandising company.

Accepted Answer

Merchandise inventory is a cur

Question 11

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business. The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

Accepted Answer

The answer of FOB _________________ means ownership of goods transfers...

Question 12

The year-end adjusted trial balance of ABC Supply for the current year is shown below:
  
Prepare closing entries at December 31 for the current year.

Accepted Answer

The answer of The year-end adjusted trial balance of ABC...

Question 13

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) $\begin{array}{|c|r|r|}
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) $\begin{array}{|c|r|r|}
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$ 
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) $\begin{array} { | c | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$ 
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) $\begin{array}{|c|r|r|}
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) $\begin{array}{|c|r|r|}
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$ 
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) $\begin{array} { | c | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$ 
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 14

Fill in the blanks (a) through (g) for the Hendricks Company for each of the income statements for 2009, 2010 and 2011.

Accepted Answer

The answer of Fill in the blanks (a) through (g)...

Question 15

___________ expenses are those expenses that support a company's overall operations and include expenses related to accounting, human resource management and financial management.

Accepted Answer

General an

Question 16

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. The journal entry or entries that Robertson will make on October 1 is:

Accepted Answer

A) $\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) $\begin{array}{|c|c|c|}
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$ 
C) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$ 
D) $\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$ 
E) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 4,000 & \
\hline \text { Sales } & & 4,000 \
\hline
\end{array}$ 
A) $\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$ 
B) $\begin{array}{|c|c|c|}
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$ 
C) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$ 
D) $\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$ 
E) $\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 4,000 & \
\hline \text { Sales } & & 4,000 \
\hline
\end{array}$

Question 17

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 18

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

Question 19

A company has net sales of $1,909,000, sales commissions in the amount of $250,000, net income was $866,400, and the gross profit ratio is 60%, what is the amount of cost of goods sold?

Accepted Answer

The answer of A company has net sales of $1,909,000,...

Question 20

A company purchased merchandise inventory at a cost of $4,300 with credit terms 3/15, net 45. If the company elects to pay within the discount period, what would be the appropriate journal entry?

Accepted Answer

A) $\begin{array}{|c|c|c|}
\hline \text { Merchandise Inventory } & 4,300 & \
\hline \text { Accounts Payable } & & 4,300 \
\hline
\end{array}$ 
B) $\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 4,300 & \
\hline \text { Merchandise Inventory } & & 4,300 \
\hline
\end{array}$ 
C) $\begin{array} { | c | c | c | } 
\hline \text { Purchase Discount } & 4,171 & \
\hline \text { Accounts Payable } & & 4,171 \
\hline
\end{array}$ 
D) $\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 4,171 & \
\hline \text { Cash } & & 4,171 \
\hline
\end{array}$ 
E) $\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 4,300 & \
\hline \text { Merchandise Inventory } & & 129 \
\hline \text { Cash } & & 4,171 \
\hline
\end{array}$ 
A) $\begin{array}{|c|c|c|}
\hline \text { Merchandise Inventory } & 4,300 & \
\hline \text { Accounts Payable } & & 4,300 \
\hline
\end{array}$ 
B) $\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 4,300 & \
\hline \text { Merchandise Inventory } & & 4,300 \
\hline
\end{array}$ 
C) $\begin{array} { | c | c | c | } 
\hline \text { Purchase Discount } & 4,171 & \
\hline \text { Accounts Payable } & & 4,171 \
\hline
\end{array}$ 
D) $\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 4,171 & \
\hline \text { Cash } & & 4,171 \
\hline
\end{array}$ 
E) $\begin{array} { | c | r | r | } 
\hline \text { Accounts Payable } & 4,300 & \
\hline \text { Merchandise Inventory } & & 129 \
\hline \text { Cash } & & 4,171 \
\hline
\end{array}$

Exam 4: Accounting for Merchandising Operations

A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

A company purchased $1,500 of merchandise on credit with terms 3/15, n/30. How much will be debited to Accounts Payable if the company pays $485 cash on this account within ten days?

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Gross profit is the same as gross margin.

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 perpetual inventory system. The journal entry or entries that Robertson will make on October 1 is:

A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals:

The following information refers to Annie's Attic and its competitors in the antiques business. Required: Comment on the relative liquidity positions of these companies.

Identify and explain the key components of income for a merchandising company.

In a perpetual inventory system, the merchandise inventory account must be closed at the end of the accounting period.

Describe the key attributes of inventory for a merchandising company.

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business. The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

The year-end adjusted trial balance of ABC Supply for the current year is shown below: Prepare closing entries at December 31 for the current year.

Fill in the blanks (a) through (g) for the Hendricks Company for each of the income statements for 2009, 2010 and 2011.

___________ expenses are those expenses that support a company's overall operations and include expenses related to accounting, human resource management and financial management.

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. The journal entry or entries that Robertson will make on October 1 is:

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

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 has net sales of $1,909,000, sales commissions in the amount of $250,000, net income was $866,400, and the gross profit ratio is 60%, what is the amount of cost of goods sold?

A company purchased merchandise inventory at a cost of $4,300 with credit terms 3/15, net 45. If the company elects to pay within the discount period, what would be the appropriate journal entry?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Decentralization and Performance Evaluation

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Investments and International Operations

Accounting for Partnerships

Appendix : Accounting With Special Journals

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