Question 1

The acid-test ratio:

Accepted Answer

A)  Is also called the quick ratio.
B)  Measures profitability.
C)  Measures inventory turnover.
D)  Is generally greater than the current ratio.
E)  Measures return on assets.F) A) and D)
G) None of the above

Question 2

Garza Company had sales of $135,000,sales discounts of $2,000,and sales returns of $3,200.Garza Company's net sales equals:

Accepted Answer

A)  $5,200.
B)  $129,800.
C)  $133,000.
D)  $135,000.
E)  $140,200.F) B) and E)
G) None of the above

Question 3

All of the following statements regarding sales returns and allowances are true except:

Accepted Answer

A)  A reduction is the selling price because of damaged merchandise is included in sales returns and allowances.
B)  There is no relationship between sales returns and allowances and the possibility of lost future sales.
C)  Sales returns and allowances are recorded in a separate contra-revenue account.
D)  Sales returns and allowances are rarely disclosed in published financial statements.
E)  Sales returns and allowances are closed to the Income Summary account.F) None of the above
G) A) and E)

Question 4

A debit memorandum is:

Accepted Answer

A)  Required whenever a journal entry is recorded.
B)  The source document for the purchase of merchandise inventory.
C)  Required when a purchase discount is granted.
D)  The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records.
E)  Not necessary in a perpetual inventory system.F) A) and B)
G) C) and E)

Question 5

A merchandiser:

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) A) and E)
G) A) and B)

Question 6

Cushman Company had $800,000 in sales,sales discounts of $12,000,sales returns and allowances of $18,000,cost of goods sold of $380,000,and $275,000 in operating expenses.Net income equals:

Accepted Answer

A)  $770,000.
B)  $402,000.
C)  $390,000.
D)  $115,000.
E)  $408,000.F) A) and E)
G) A) and B)

Question 7

Cost of goods sold:

Accepted Answer

A)  Is another term for merchandise sales.
B)  Is the term used for the expense of buying and preparing merchandise for sale.
C)  Is another term for revenue.
D)  Is also called gross margin.
E)  Is a term only used by service firms.F) B) and C)
G) C) and D)

Question 8

When a company has no reportable nonoperating activities,its income from operations is reported as ___________________.

Accepted Answer

The answer of When a company has no reportable nonoperating...

Question 9

Forrest's Cycle Shop uses a perpetual inventory accounting system and had the following transactions during the month of July:

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Prepare the required journal ...

Question 10

Juniper Company uses a perpetual inventory system.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The amount of the cash paid on August 16 equals:

Accepted Answer

A)  $8,167.50.
B)  $9,652.50.
C)  $9,750.00.
D)  $8,250.00.
E)  $8,152.50.F) B) and E)
G) A) and B)

Question 11

From the adjusted trial balance given below for the Grayson Company,prepare a multiple-step income statement in good form.Salaries expense and building depreciation expense should be equally divided between selling activities and the general and administrative activities.

Accepted Answer

The answer of From the adjusted trial balance given below...

Question 12

Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management,and financial management are called:

Accepted Answer

A)  Cost of goods sold.
B)  Selling expenses.
C)  Purchasing expenses.
D)  General and administrative expenses.
E)  Non-operating activities.F) C) and E)
G) All of the above

Question 13

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 8,it paid the full amount due.The amount of the cash paid on July 8 equals:

Accepted Answer

A)  $200.
B)  $1,564.
C)  $1,568.
D)  $1,600.
E)  $1,800.F) B) and D)
G) A) and B)

Question 14

Merchandise that customers return to the seller after a sale is referred to as ___________________.

Accepted Answer

The answer of Merchandise that customers return to the seller...

Question 15

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

Accepted Answer

The answer of From the adjusted trial balance for Fabricated...

Question 16

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 17

A company purchased $10,000 of merchandise on June 15 with terms of 3/10,n/45,and FOB shipping point.The freight charge was $500.On June 20,it returned $800 of that merchandise.On June 24,it paid the balance owed for the merchandise taking any discount it is entitled to.The cash paid on June 24 equals:

Accepted Answer

A)  $9,224.
B)  $10,200.
C)  $10,500.
D)  $10,300.
E)  $9,424.F) A) and D)
G) C) and D)

Question 18

Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment,which applies the perpetual inventory system.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 19

A period's beginning inventory is equal to the prior period's ___________________.

Accepted Answer

The answer of A period's beginning inventory is equal to...

Question 20

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 28,it paid the full amount due.The correct journal entry to record the merchandise return on July 7 is:

Accepted Answer

A)  Debit Merchandise Inventory $1,600;credit Cash $1,600.
B)  Debit Merchandise Inventory $200;credit Accounts Payable $200.
C)  Debit Merchandise Inventory $200;credit Sales Returns $200.
D)  Debit Accounts Payable $200;credit Merchandise Inventory $200.
E)  Debit Accounts Payable $1,800;credit Purchase Returns $200;credit Merchandise Inventory $1,600.F) All of the above
G) C) and D)

Exam 5: Accounting for Merchandising Operations

Merchandise that customers return to the seller after a sale is referred to as ___________________.

Correct Answer
verified

Forrest's Cycle Shop uses a perpetual inventory accounting system and had the following transactions during the month of July:

Correct Answer
verified
Prepare the required journal ...
View Answer

Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management,and financial management are called:

Correct Answer
verified

A period's beginning inventory is equal to the prior period's ___________________.

Correct Answer
verified

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 8,it paid the full amount due.The amount of the cash paid on July 8 equals:

Correct Answer
verified

Correct Answer
verified

Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment,which applies the perpetual inventory system.

Correct Answer
verified

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

Correct Answer
verified

A merchandiser:

Correct Answer
verified

When a company has no reportable nonoperating activities,its income from operations is reported as ___________________.

Correct Answer
verified

Juniper Company uses a perpetual inventory system.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The amount of the cash paid on August 16 equals:

Correct Answer
verified

Cushman Company had $800,000 in sales,sales discounts of $12,000,sales returns and allowances of $18,000,cost of goods sold of $380,000,and $275,000 in operating expenses.Net income equals:

Correct Answer
verified

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 28,it paid the full amount due.The correct journal entry to record the merchandise return on July 7 is:

Correct Answer
verified

From the adjusted trial balance given below for the Grayson Company,prepare a multiple-step income statement in good form.Salaries expense and building depreciation expense should be equally divided between selling activities and the general and administrative activities.

Correct Answer
verified

Cost of goods sold:

Correct Answer
verified

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

Correct Answer
verified

All of the following statements regarding sales returns and allowances are true except:

Correct Answer
verified

The acid-test ratio:

Correct Answer
verified

Garza Company had sales of $135,000,sales discounts of $2,000,and sales returns of $3,200.Garza Company's net sales equals:

Correct Answer
verified

A debit memorandum is:

Correct Answer
verified

Exam 5: Accounting for Merchandising Operations

Merchandise that customers return to the seller after a sale is referred to as ___________________.

Correct AnswerverifiedShow Answer

Forrest's Cycle Shop uses a perpetual inventory accounting system and had the following transactions during the month of July:

Correct Answerverified Prepare the required journal ...View AnswerShow Answer

Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management,and financial management are called:

Correct AnswerverifiedShow Answer

A period's beginning inventory is equal to the prior period's ___________________.

Correct AnswerverifiedShow Answer

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 8,it paid the full amount due.The amount of the cash paid on July 8 equals:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment,which applies the perpetual inventory system.

Correct AnswerverifiedShow Answer

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

Correct AnswerverifiedShow Answer

A merchandiser:

Correct AnswerverifiedShow Answer

When a company has no reportable nonoperating activities,its income from operations is reported as ___________________.

Correct AnswerverifiedShow Answer

Juniper Company uses a perpetual inventory system.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The amount of the cash paid on August 16 equals:

Correct AnswerverifiedShow Answer

Cushman Company had $800,000 in sales,sales discounts of $12,000,sales returns and allowances of $18,000,cost of goods sold of $380,000,and $275,000 in operating expenses.Net income equals:

Correct AnswerverifiedShow Answer

A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 28,it paid the full amount due.The correct journal entry to record the merchandise return on July 7 is:

Correct AnswerverifiedShow Answer

From the adjusted trial balance given below for the Grayson Company,prepare a multiple-step income statement in good form.Salaries expense and building depreciation expense should be equally divided between selling activities and the general and administrative activities.

Correct AnswerverifiedShow Answer

Cost of goods sold:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All of the following statements regarding sales returns and allowances are true except:

Correct AnswerverifiedShow Answer

The acid-test ratio:

Correct AnswerverifiedShow Answer

Garza Company had sales of $135,000,sales discounts of $2,000,and sales returns of $3,200.Garza Company's net sales equals:

Correct AnswerverifiedShow Answer

A debit memorandum is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified
Prepare the required journal ...
View Answer

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