Question 1

The service fee that credit card companies charge retailers varies and is the primary reason why some businesses do accept all credit cards.

Accepted Answer

A) True 
 B)False

Question 2

Most companies will take a purchases discount,because 1% or 2% discounts are insignificant.

Accepted Answer

A) True 
 B)False

Question 3

On March 5th,Blowout Sales makes $22,500.00 in sales on the company's own credit cards.The cost of merchandise sold are $16,825.00.Journalize the sales and recognition of the cost of merchandise sold.

Accepted Answer

Mar 5 Accounts Receivable 22,5...

Question 4

The statement of owner's equity shows

Accepted Answer

A)  only net income,beginning and ending capital
B)  only total assets,beginning and ending capital
C)  only net income,beginning capital,and withdrawals
D)  all the changes in the owner's capital as a result of net income,net loss,additional investments,and withdrawalsE) All of the above
F) B) and C)

Question 5

If merchandise sold on account is returned to the seller,the seller may inform the customer of the details by issuing a

Accepted Answer

A)  sales invoice
B)  purchase invoice
C)  credit memo
D)  debit memoE) C) and D)
F) B) and D)

Question 6

Computerized systems can be used to capture accounting information such as accounts receivable,inventory items,accounts payable,and sales.

Accepted Answer

A) True 
 B)False

Question 7

When a large quantity of merchandise is purchased,a reduction allowed on the sale price is called a trade discount.

Accepted Answer

A) True 
 B)False

Question 8

Anthony Company sold Madison Company merchandise on account FOB shipping point,2/10,net 30,for $10,000.Anthony prepaid the $300 shipping charge.Which of the following entries does Anthony make to record this sale?

Accepted Answer

A)  Accounts Receivable-Madison,debit $10,000;Sales,credit $10,000
B)  Accounts Receivable-Madison,debit $10,000;Sales,credit $10,000,and Accounts Receivable-Madison,debit $300;Cash,credit $300
C)  Accounts Receivable-Madison,debit $10,300;Sales,credit $10,300
D)  Accounts Receivable-Madison,debit $10,000;Sales,credit $10,000,and Freight Out,debit $300;Cash,credit $300E) B) and D)
F) A) and B)

Question 9

Gross profit is equal to:

Accepted Answer

A)  sales plus (sales discounts and sales returns and allowances) plus cost of merchandise sold
B)  sales plus sales returns and allowances less sales discounts less cost of merchandise sold
C)  sales plus sales discounts less sales returns and allowances less cost of merchandise sold
D)  sales less (sales discounts and sales returns and allowances) less cost of merchandise soldE) All of the above
F) B) and C)

Question 10

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Accepted Answer

A)  n/30
B)  FOB shipping point
C)  FOB destination
D)  consignedE) A) and C)
F) B) and D)

Question 11

When the perpetual inventory system is used,the inventory sold is shown on the income statement as

Accepted Answer

A)  cost of merchandise sold
B)  purchases
C)  purchases returns and allowances
D)  net purchasesE) B) and C)
F) A) and C)

Question 12

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

Accepted Answer

A)  only the list price
B)  only the sales tax
C)  the list price plus the sales tax
D)  the list price less the sales taxE) B) and D)
F) B) and C)

Question 13

Net sales is equal to sales minus cost of merchandise sold.

Accepted Answer

A) True 
 B)False

Question 14

Journalize the following transactions assuming the perpetual inventory system:
  
Journal

Accepted Answer

The answer of Journalize the following transactions assuming the perpetual...

Question 15

Which of the following accounts has a normal debit balance?

Accepted Answer

A)  Accounts Payable
B)  Sales Returns and Allowances
C)  Sales
D)  Interest RevenueE) None of the above
F) A) and C)

Question 16

Cleary Company had total Sales of $550,000;Sales Discounts of $10,000;Sales Returns of $40,000 and Cost of Merchandise Sold of $200,000 during 2010.The total asset balance at the beginning of the year was $175,000 and at the end of the year was $167,000.Calculate the ratio of net sales to total assets (Round answer to 2 decimal points) .

Accepted Answer

A)  1.75
B)  2.92
C)  .34
D)  .57E) None of the above
F) All of the above

Question 17

Calculate the gross profit for Jonas Company based on the data given below:

Accepted Answer

A)  $753,250
B)  $700,750
C)  $162,750
D)  $215,250E) None of the above
F) C) and D)

Question 18

In a periodic inventory system,the cost of merchandise purchased includes the cost of freight-in.

Accepted Answer

A) True 
 B)False

Question 19

The buyer will include the sales tax as part of the cost of items purchased for use.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following is not a difference between a retail business and a service business?

Accepted Answer

A)  in what is sold
B)  the inclusion of gross profit in the income statement
C)  accounting equation
D)  merchandise inventory included in the balance sheetE) A) and B)
F) None of the above

Exam 5: Accounting for Merchandising Businesses

When a large quantity of merchandise is purchased,a reduction allowed on the sale price is called a trade discount.

Correct Answer
verified

The service fee that credit card companies charge retailers varies and is the primary reason why some businesses do accept all credit cards.

Correct Answer
verified

Correct Answer
verified

The buyer will include the sales tax as part of the cost of items purchased for use.

Correct Answer
verified

Journalize the following transactions assuming the perpetual inventory system: Journal

Correct Answer
verified

In a periodic inventory system,the cost of merchandise purchased includes the cost of freight-in.

Correct Answer
verified

Most companies will take a purchases discount,because 1% or 2% discounts are insignificant.

Correct Answer
verified

Anthony Company sold Madison Company merchandise on account FOB shipping point,2/10,net 30,for $10,000.Anthony prepaid the $300 shipping charge.Which of the following entries does Anthony make to record this sale?

Correct Answer
verified

Calculate the gross profit for Jonas Company based on the data given below:

Correct Answer
verified

When the perpetual inventory system is used,the inventory sold is shown on the income statement as

Correct Answer
verified

On March 5th,Blowout Sales makes $22,500.00 in sales on the company's own credit cards.The cost of merchandise sold are $16,825.00.Journalize the sales and recognition of the cost of merchandise sold.

Correct Answer
verified
Mar 5 Accounts Receivable 22,5...
View Answer

Gross profit is equal to:

Correct Answer
verified

If merchandise sold on account is returned to the seller,the seller may inform the customer of the details by issuing a

Correct Answer
verified

Which of the following accounts has a normal debit balance?

Correct Answer
verified

Net sales is equal to sales minus cost of merchandise sold.

Correct Answer
verified

The statement of owner's equity shows

Correct Answer
verified

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

Correct Answer
verified

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Correct Answer
verified

Which one of the following is not a difference between a retail business and a service business?

Correct Answer
verified

Computerized systems can be used to capture accounting information such as accounts receivable,inventory items,accounts payable,and sales.

Correct Answer
verified

Exam 5: Accounting for Merchandising Businesses

When a large quantity of merchandise is purchased,a reduction allowed on the sale price is called a trade discount.

Correct AnswerverifiedShow Answer

The service fee that credit card companies charge retailers varies and is the primary reason why some businesses do accept all credit cards.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The buyer will include the sales tax as part of the cost of items purchased for use.

Correct AnswerverifiedShow Answer

Journalize the following transactions assuming the perpetual inventory system: Journal

Correct AnswerverifiedShow Answer

In a periodic inventory system,the cost of merchandise purchased includes the cost of freight-in.

Correct AnswerverifiedShow Answer

Most companies will take a purchases discount,because 1% or 2% discounts are insignificant.

Correct AnswerverifiedShow Answer

Anthony Company sold Madison Company merchandise on account FOB shipping point,2/10,net 30,for $10,000.Anthony prepaid the $300 shipping charge.Which of the following entries does Anthony make to record this sale?

Correct AnswerverifiedShow Answer

Calculate the gross profit for Jonas Company based on the data given below:

Correct AnswerverifiedShow Answer

When the perpetual inventory system is used,the inventory sold is shown on the income statement as

Correct AnswerverifiedShow Answer

On March 5th,Blowout Sales makes $22,500.00 in sales on the company's own credit cards.The cost of merchandise sold are $16,825.00.Journalize the sales and recognition of the cost of merchandise sold.

Correct AnswerverifiedMar 5 Accounts Receivable 22,5...View AnswerShow Answer

Gross profit is equal to:

Correct AnswerverifiedShow Answer

If merchandise sold on account is returned to the seller,the seller may inform the customer of the details by issuing a

Correct AnswerverifiedShow Answer

Which of the following accounts has a normal debit balance?

Correct AnswerverifiedShow Answer

Net sales is equal to sales minus cost of merchandise sold.

Correct AnswerverifiedShow Answer

The statement of owner's equity shows

Correct AnswerverifiedShow Answer

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

Correct AnswerverifiedShow Answer

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Correct AnswerverifiedShow Answer

Which one of the following is not a difference between a retail business and a service business?

Correct AnswerverifiedShow Answer

Computerized systems can be used to capture accounting information such as accounts receivable,inventory items,accounts payable,and sales.

Correct AnswerverifiedShow Answer

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Mar 5 Accounts Receivable 22,5...
View Answer

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