Question 1

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 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)   $1,455F) A) and C)
G) A) and D)

Question 3

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)    Sales 5,800 Accounts receivable 5,800\begin{array} { | l | r | r | } \hline 	ext { Sales } & 5,800 & \\hline 	ext { Accounts receivable } & & 5,800 \\hline\end{array} Sales  Accounts receivable ​5,800​5,800​​ 
B)    Sales 5,800 Accounts receivable 5,800 Cost of goods sold 4,000 Merchandise Inventory 4,000\begin{array}{|c|c|c|}\hline 	ext { Sales } & 5,800 & \\hline 	ext { Accounts receivable } & & 5,800 \\hline 	ext { Cost of goods sold } & 4,000 & \\hline 	ext { Merchandise Inventory } & & 4,000 \\hline\end{array} Sales  Accounts receivable  Cost of goods sold  Merchandise Inventory ​5,8004,000​5,8004,000​​ 
C)    Accounts receivable 5,800 Sales 5,800\begin{array} { | c | r | r | } \hline 	ext { Accounts receivable } & 5,800 & \\hline 	ext { Sales } & & 5,800 \\hline\end{array} Accounts receivable  Sales ​5,800​5,800​​ 
D)    Accounts receivable 5,800 Sales 5,800 Cost of goods sold 4,000 Merchandise inventory 4,000\begin{array} { | l | r | r | } \hline 	ext { Accounts receivable } & 5,800 & \\hline 	ext { Sales } & & 5,800 \\hline 	ext { Cost of goods sold } & 4,000 & \\hline 	ext { Merchandise inventory } & & 4,000 \\hline\end{array} Accounts receivable  Sales  Cost of goods sold  Merchandise inventory ​5,8004,000​5,8004,000​​ 
E)    Accounts receivable 4,000 Sales 4,000\begin{array} { | c | r | r | } \hline 	ext { Accounts receivable } & 4,000 & \\hline 	ext { Sales } & & 4,000 \\hline\end{array} Accounts receivable  Sales ​4,000​4,000​​F) A) and B)
G) B) and E)

Question 4

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)    Merchandise Inventory 4,300 Accounts Payable 4,300\begin{array}{|c|c|c|}\hline 	ext { Merchandise Inventory } & 4,300 & \\hline 	ext { Accounts Payable } & & 4,300 \\hline\end{array} Merchandise Inventory  Accounts Payable ​4,300​4,300​​ 
B)    Accounts Payable 4,300 Merchandise Inventory 4,300\begin{array} { | c | c | c | } \hline 	ext { Accounts Payable } & 4,300 & \\hline 	ext { Merchandise Inventory } & & 4,300 \\hline\end{array} Accounts Payable  Merchandise Inventory ​4,300​4,300​​ 
C)    Purchase Discount 4,171 Accounts Payable 4,171\begin{array} { | c | c | c | } \hline 	ext { Purchase Discount } & 4,171 & \\hline 	ext { Accounts Payable } & & 4,171 \\hline\end{array} Purchase Discount  Accounts Payable ​4,171​4,171​​ 
D)    Accounts Payable 4,171 Cash 4,171\begin{array} { | c | c | c | } \hline 	ext { Accounts Payable } & 4,171 & \\hline 	ext { Cash } & & 4,171 \\hline\end{array} Accounts Payable  Cash ​4,171​4,171​​ 
E)    Accounts Payable 4,300 Merchandise Inventory 129 Cash 4,171\begin{array} { | c | r | r | } \hline 	ext { Accounts Payable } & 4,300 & \\hline 	ext { Merchandise Inventory } & & 129 \\hline 	ext { Cash } & & 4,171 \\hline\end{array} Accounts Payable  Merchandise Inventory  Cash ​4,300​1294,171​​F) None of the above
G) C) and D)

Question 5

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

Accepted Answer

The basic components of income begin wit...

Question 6

Gross profit is the same as gross margin.

Accepted Answer

A) True 
 B)False

Question 7

Describe the key attributes of inventory for a merchandising company.

Accepted Answer

Merchandise inventory is a cur...

Question 8

___________ 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 9

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 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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)    Cash 5,800 Accounts receivable 5,800\begin{array}{|c|r|r|}\hline 	ext { Cash } & 5,800 & \\hline 	ext { Accounts receivable } & & 5,800 \\hline\end{array} Cash  Accounts receivable ​5,800​5,800​​ 
B)    Cash 4,000 Accounts receivable 4,000\begin{array}{|c|r|r|}\hline 	ext { Cash } & 4,000 & \\hline 	ext { Accounts receivable } & & 4,000 \\hline\end{array} Cash  Accounts receivable ​4,000​4,000​​ 
C)    Cash 3,920 Sales discounts 80 Accounts receivable 4,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 3,920 & \\hline 	ext { Sales discounts } & 80 & \\hline 	ext { Accounts receivable } & & 4,000 \\hline\end{array} Cash  Sales discounts  Accounts receivable ​3,92080​4,000​​ 
D)    Cash 5,684 Accounts receivable 5,684\begin{array} { | c | r | r | } \hline 	ext { Cash } & 5,684 & \\hline 	ext { Accounts receivable } & & 5,684 \\hline\end{array} Cash  Accounts receivable ​5,684​5,684​​ 
E)    Cash 5,684 Sales discounts 116 Accounts receivable 5,800\begin{array} { | l | r | r | } \hline 	ext { Cash } & 5,684 & \\hline 	ext { Sales discounts } & 116 & \\hline 	ext { Accounts receivable } & & 5,800 \\hline\end{array} Cash  Sales discounts  Accounts receivable ​5,684116​5,800​​F) A) and B)
G) A) and C)

Question 13

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 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

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)   $1,800F) C) and E)
G) C) and D)

Question 16

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 17

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 18

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)    Sales 5,800 Accounts receivable 5,800\begin{array} { | l | r | r | } \hline 	ext { Sales } & 5,800 & \\hline 	ext { Accounts receivable } & & 5,800 \\hline\end{array} Sales  Accounts receivable ​5,800​5,800​​ 
B)    Sales 5,800 Accounts receivable 5,800 Cost of goods sold 4,000 Merchandise Inventory 4,000\begin{array} { | l | r | r | } \hline 	ext { Sales } & 5,800 & \\hline 	ext { Accounts receivable } & & 5,800 \\hline 	ext { Cost of goods sold } & 4,000 & \\hline 	ext { Merchandise Inventory } & & 4,000 \\hline\end{array} Sales  Accounts receivable  Cost of goods sold  Merchandise Inventory ​5,8004,000​5,8004,000​​ 
C)    Accounts receivable 5,800 Sales 5,800\begin{array} { | c | r | r | } \hline 	ext { Accounts receivable } & 5,800 & \\hline 	ext { Sales } & & 5,800 \\hline\end{array} Accounts receivable  Sales ​5,800​5,800​​ 
D)    Accounts receivable 5,800 Sales 5,800 Cost of goods sold 4,000 Merchandise inventory 4,000\begin{array} { | l | r | r | } \hline 	ext { Accounts receivable } & 5,800 & \\hline 	ext { Sales } & & 5,800 \\hline 	ext { Cost of goods sold } & 4,000 & \\hline 	ext { Merchandise inventory } & & 4,000 \\hline\end{array} Accounts receivable  Sales  Cost of goods sold  Merchandise inventory ​5,8004,000​5,8004,000​​ 
E)    Accounts receivable 4,000 Sales 4,000\begin{array} { | c | r | r | } \hline 	ext { Accounts receivable } & 4,000 & \\hline 	ext { Sales } & & 4,000 \\hline\end{array} Accounts receivable  Sales ​4,000​4,000​​F) All of the above
G) A) and B)

Question 19

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 20

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)   $1,005,720F) B) and D)
G) A) and B)

Exam 4: Accounting for Merchandising Operations

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.

Correct Answer
verified

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

Correct Answer
verified

Describe the key attributes of inventory for a merchandising company.

Correct Answer
verified
Merchandise inventory is a cur...
View Answer

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

Correct Answer
verified
General an...
View Answer

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.

Correct Answer
verified

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?

Correct Answer
verified

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?

Correct Answer
verified

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:

Correct Answer
verified

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:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Gross profit is the same as gross margin.

Correct Answer
verified

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?

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 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?

Correct Answer
verified

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.

Correct Answer
verified
Chisolm's Collectibles, Martin's Marbles...
View Answer

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

Correct Answer
verified

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:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified
The basic components of income begin wit...
View Answer

Exam 4: Accounting for Merchandising Operations

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Describe the key attributes of inventory for a merchandising company.

Correct AnswerverifiedMerchandise inventory is a cur...View AnswerShow Answer

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

Correct AnswerverifiedGeneral an...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gross profit is the same as gross margin.

Correct AnswerverifiedShow Answer

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?

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 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?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedChisolm's Collectibles, Martin's Marbles...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe basic components of income begin wit...View AnswerShow Answer

Correct Answer
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Correct Answer
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Merchandise inventory is a cur...
View Answer

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General an...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Chisolm's Collectibles, Martin's Marbles...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The basic components of income begin wit...
View Answer