Question 1

The current period's ending inventory is:

Accepted Answer

A)   The next period's beginning inventory.
B)   The current period's cost of goods sold.
C)   The prior period's beginning inventory.
D)   The current period's net purchases.
E)   The current period's beginning inventory.F) C) and D)
G) None of the above

Question 2

Why does Chelsea Eubank's company,Faithful Fish,use a perpetual inventory system?

Accepted Answer

A perpetual inventory system e...

Question 3

A period's ___________________ becomes the next period's beginning inventory.

Accepted Answer

The answer of A period's ___________________ becomes the next period's...

Question 4

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 5

A trade discount is:

Accepted Answer

A)   A term used by a purchaser to describe a cash discount given to customers for prompt payment,
B)   A reduction in price below the list price,
C)   A term used by a seller to describe a cash discount granted to customers for prompt payment,
D)   A reduction in price for prompt payment,
E)   Also called a rebate,F) D) and E)
G) B) and C)

Question 6

Calculate the gross margin ratio for each of the following separate cases A through D:
 $\begin{array}{|l|r|r|r|r|}
\hline& \mathrm{A} & \mathrm{B} & \mathrm{C} & \mathrm{D} \
\hline \text { Net sales } & \$ 135,000 & \$ 623,500 & \$ 37,800 & \$ 259,600 \
\hline \text { Cost of goods sold } & 83,600 & 249,200 & 13,230 & 127,204 \
\hline
\end{array}$

Accepted Answer

The answer of Calculate the gross margin ratio for each...

Question 7

A company had net sales of $82,000,cost of goods sold of $70,000,and other expenses of $2,000.Its gross margin ratio equals:

Accepted Answer

A)   85.37%
B)   2.44%
C)   14.63%
D)   16.67%
E)   683.33%F) A) and D)
G) A) and E)

Question 8

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

$1,909,00...

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.F) None of the above
G) A) and E)

Question 11

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income of $263,500,and cost of goods sold of $420,000.What is the gross profit/margin ratio?

Accepted Answer

A)   72.0%
B)   53.7%
C)   67.1%
D)   81.7%
E)   17.6%F) B) and C)
G) A) and E)

Question 12

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

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: $25,000F) None of the above
G) D) and E)

Question 14

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.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is:

Accepted Answer

A)     Sales Returns and Allowances 500 Accounts Receivable 500 Merchandise Inventory 350 Cost of Goods Sold 350\begin{array} { | l | r | r | } \hline 	ext { Sales Returns and Allowances } & 500 & \\hline 	ext { Accounts Receivable } & & 500 \\hline 	ext { Merchandise Inventory } & 350 & \\hline 	ext { Cost of Goods Sold } & & 350 \\hline\end{array} Sales Returns and Allowances  Accounts Receivable  Merchandise Inventory  Cost of Goods Sold ​500350​500350​​ 
B)     Sales Returns and Allowances 500 Accounts Receivable 500\begin{array}{|l|r|r|}\hline 	ext { Sales Returns and Allowances } & 500 & \\hline 	ext { Accounts Receivable } & & 500 \\hline\end{array} Sales Returns and Allowances  Accounts Receivable ​500​500​​ 
C)     Accounts Receivable 500 Sales Returns and Allowances 500\begin{array}{|l|r|r|}\hline 	ext { Accounts Receivable } & 500 & \\hline 	ext { Sales Returns and Allowances } & & 500 \\hline\end{array} Accounts Receivable  Sales Returns and Allowances ​500​500​​ 
D)     Accounts Receivable 500 Sales Returns and Allowances 500 Cost of Goods Sold 350 Merchandise Inventory 350\begin{array} { | l | r | r | } \hline 	ext { Accounts Receivable } & 500 & \\hline 	ext { Sales Returns and Allowances } & & 500 \\hline 	ext { Cost of Goods Sold } & 350 & \\hline 	ext { Merchandise Inventory } & & 350 \\hline\end{array} Accounts Receivable  Sales Returns and Allowances  Cost of Goods Sold  Merchandise Inventory ​500350​500350​​ 
E)     Sales Returns and Allowances 350 Accounts Receivable 350\begin{array}{|l|r|r|}\hline 	ext { Sales Returns and Allowances } & 350 & \\hline 	ext { Accounts Receivable } & & 350 \\hline\end{array} Sales Returns and Allowances  Accounts Receivable ​350​350​​  F) C) and E)
G) B) and C)

Question 15

Cash sales shorten the operating cycle for a merchandiser; credit purchases lengthen operating cycles.

Accepted Answer

A) True 
 B)False

Question 16

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: $500,000F) D) and E)
G) A) and C)

Question 17

Sales discounts can benefit a seller by decreasing the delay in receiving cash and ___________.

Accepted Answer

reducing f...

Question 18

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Accepted Answer

A) True 
 B)False

Question 19

Distinguish between selling expenses and general and administrative expenses.

Accepted Answer

Selling expenses include the expenses of...

Question 20

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

Accepted Answer

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

Exam 4: Accounting for Merchandising Operations

Correct Answer
verified

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

Correct Answer
verified

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

Correct Answer
verified
$1,909,00...
View Answer

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income of $263,500,and cost of goods sold of $420,000.What is the gross profit/margin ratio?

Correct Answer
verified

A merchandising company:

Correct Answer
verified

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.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

A period's ___________________ becomes the next period's beginning inventory.

Correct Answer
verified

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Correct Answer
verified

Sales discounts can benefit a seller by decreasing the delay in receiving cash and ___________.

Correct Answer
verified
reducing f...
View Answer

Distinguish between selling expenses and general and administrative expenses.

Correct Answer
verified
Selling expenses include the expenses of...
View Answer

Cash sales shorten the operating cycle for a merchandiser; credit purchases lengthen operating cycles.

Correct Answer
verified

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

Correct Answer
verified
\[\begin{array} { | l | l | l | r | r | ...
View Answer

A trade discount is:

Correct Answer
verified

The current period's ending inventory is:

Correct Answer
verified

A company had net sales of $82,000,cost of goods sold of $70,000,and other expenses of $2,000.Its gross margin ratio equals:

Correct Answer
verified

Why does Chelsea Eubank's company,Faithful Fish,use a perpetual inventory system?

Correct Answer
verified
A perpetual inventory system e...
View Answer

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Correct Answer
verified

Exam 4: Accounting for Merchandising Operations

Correct AnswerverifiedShow Answer

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

Correct AnswerverifiedShow Answer

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

Correct Answerverified $1,909,00...View AnswerShow Answer

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income of $263,500,and cost of goods sold of $420,000.What is the gross profit/margin ratio?

Correct AnswerverifiedShow Answer

A merchandising company:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A period's ___________________ becomes the next period's beginning inventory.

Correct AnswerverifiedShow Answer

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Correct AnswerverifiedShow Answer

Sales discounts can benefit a seller by decreasing the delay in receiving cash and ___________.

Correct Answerverifiedreducing f...View AnswerShow Answer

Distinguish between selling expenses and general and administrative expenses.

Correct AnswerverifiedSelling expenses include the expenses of...View AnswerShow Answer

Cash sales shorten the operating cycle for a merchandiser; credit purchases lengthen operating cycles.

Correct AnswerverifiedShow Answer

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

Correct Answerverified\[\begin{array} { | l | l | l | r | r | ...View AnswerShow Answer

A trade discount is:

Correct AnswerverifiedShow Answer

The current period's ending inventory is:

Correct AnswerverifiedShow Answer

A company had net sales of $82,000,cost of goods sold of $70,000,and other expenses of $2,000.Its gross margin ratio equals:

Correct AnswerverifiedShow Answer

Why does Chelsea Eubank's company,Faithful Fish,use a perpetual inventory system?

Correct AnswerverifiedA perpetual inventory system e...View AnswerShow Answer

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Correct AnswerverifiedShow Answer

Correct Answer
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$1,909,00...
View Answer

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reducing f...
View Answer

Correct Answer
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Selling expenses include the expenses of...
View Answer

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Correct Answer
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\[\begin{array} { | l | l | l | r | r | ...
View Answer

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A perpetual inventory system e...
View Answer

Correct Answer
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