Exam 4: Reporting and Analyzing Merchandising Operations

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

From the adjusted trial balance for Fabricated Products Company, Inc. given below, prepare the necessary closing entries.

Non-operating activities reported on the income statement that include interest expense, losses from asset disposals, and casualty losses are called ____________________________.

Frisco Company Inc.'s Merchandise Inventory account at the end of year 2015 has a balance of $62,115, but a physical count reveals that only $61,900 of inventory exists. The adjusting entry to record the inventory shrinkage is:

Match the following terms with the appropriate definitions.

The following information refers to Percy's Records and its competitors in the music store business. Required: Comment on the relative liquidity positions of these companies.

How do closing entries for a merchandising company that uses the perpetual inventory system differ from the closing entries for a service company?

A seller usually prepares a ____________________ to confirm a buyer's return or allowance, and informs the buyer of the seller's credit to the buyer's Account Receivable on the seller's books.

A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

Describe the recording process (including costs) for the types of transactions involved in purchasing merchandise inventory when a perpetual inventory system is used.

The amount recorded for merchandise inventory purchases includes all of the following except:

Austin's Pub Supply uses the gross method of accounting for sales and a periodic inventory system and had the following sales transactions during August: Prepare the journal entries that Austin's Pub Supply must make to record these transactions.

On March 12, Masterson Company, Inc. sold merchandise in the amount of $7,800 to Forsythe Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Masterson uses the gross method of accounting for sales and a perpetual inventory system. On March 15, Forsythe returns some of the merchandise. The selling price of the returned merchandise is $600 and the cost of the merchandise returned is $350. The entry or entries that Masterson must make on March 15 is:

The current period's ending inventory is:

The following information is available for Flanders and its two main competitors in the industry, Sanders and Anders: The industry standard for the current ratio is 1.8 and the industry standard for the acid-test ratio is 1. Required: 1. Calculate the current ratio and acid-test ratio for each firm. 2. Rank the firms in decreasing order of liquidity. 3. Comment on Flanders' relative liquidity position.

What is the acid-test ratio? How does it measure a company's liquidity?

The year-end adjusted trial balance of Gordon Produce, Inc. for the current year, is shown below: Required: Prepare closing entries at December 31 for the current year.

A merchandiser:

Explain the difference between the single-step and multiple-step income statements.

The following statements are true regarding the operating cycle of a merchandising company except: