Question 1

On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Vander uses the periodic inventory system.On September 14,Jepson returns some of the merchandise.The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Vander must make on September 14 is:

Accepted Answer

A)   
B)   
C)   
D)   E) A) and D)
F) B) and D)

Question 2

A ___________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Accepted Answer

The answer of A ___________ inventory system updates the accounting...

Question 3

A company purchases merchandise with a catalog price of $20,000.The company receives a 35% trade discount from the seller.The seller also offers credit terms of 2/10,n/30.Assuming no returns were made and that payment was made within the discount period,what is the net cost of the merchandise?

Accepted Answer

A)  $13,720.
B)  $19,600.
C)  $6,860.
D)  $13,000.
E)  $12,740.F) A) and B)
G) B) and D)

Question 4

The operating cycle for a merchandiser that sells only for cash moves from:

Accepted Answer

A)  Purchases of merchandise to inventory to cash sales.
B)  Purchases of merchandise to inventory to accounts receivable to cash sales.
C)  Inventory to purchases of merchandise to cash sales.
D)  Accounts receivable to purchases of merchandise to inventory to cash sales.
E)  Accounts receivable to inventory to cash sales.F) A) and E)
G) B) and D)

Question 5

KLM Corporation's quick assets are $5,888,000,its current assets are $11,700,000 and its current liabilities are $8,000,000.Its acid-test ratio equals:

Accepted Answer

A)  0.50.
B)  0.68.
C)  0.74.
D)  1.50.
E)  2.20.F) A) and E)
G) C) and D)

Question 6

All of the following statements regarding inventory shrinkage are true except:

Accepted Answer

A)  Inventory shrinkage refers to the loss of inventory.
B)  Inventory shrinkage is determined by comparing a physical count of inventory with recorded inventory amounts.
C)  Inventory shrinkage is recognized by debiting an operating expense.
D)  Inventory shrinkage is recognized by debiting Cost of Goods Sold.
E)  Inventory shrinkage can be caused by theft or deterioration.F) All of the above
G) None of the above

Question 7

Sales less sales discounts less sales returns and allowances equals:

Accepted Answer

A)  Net purchases.
B)  Cost of goods sold.
C)  Net sales.
D)  Gross profit.
E)  Net income.F) B) and E)
G) B) and D)

Question 8

Beginning inventory plus net purchases is:

Accepted Answer

A)  Cost of goods sold.
B)  Merchandise (goods) available for sale.
C)  Ending inventory.
D)  Sales.
E)  Shown on the balance sheet.F) None of the above
G) A) and C)

Question 9

On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Vander uses the periodic inventory system.On September 14,Jepson returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is:

Accepted Answer

A)   
B)   
C)   
D)   E) A) and B)
F) A) and C)

Question 10

Zenith Company's Merchandise Inventory account at the end of year 2015 has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:

Accepted Answer

A)   
B)   
C)   
D)   E) B) and D)
F) C) and D)

Question 11

The gross margin ratio:

Accepted Answer

A)  Is also called the net profit ratio.
B)  Indicates the percent of sales revenue remaining after covering the cost of the goods sold.
C)  Is also called the profit margin.
D)  Is a measure of liquidity and should exceed 2.0 to be acceptable.
E)  Should be greater than 1 for merchandising companies.F) A) and E)
G) C) and E)

Question 12

Products that a company owns and intends to sell are called _____________________.

Accepted Answer

Merchandis...

Question 13

Liquidity problems are likely to exist when a company's acid-test ratio:

Accepted Answer

A)  Is less than the current ratio.
B)  equals 1.
C)  Is higher than 1.
D)  Is substantially lower than 1.
E)  Is higher than the current ratio.F) A) and B)
G) A) and C)

Question 14

Merchandise inventory:

Accepted Answer

A)  Is a long-term asset.
B)  Is a current asset.
C)  Includes supplies the company will use in future periods.
D)  Is classified with investments on the balance sheet.
E)  Must be sold within one month.F) B) and E)
G) All of the above

Question 15

A company has sales of $375,000 and its gross profit is $157,500.Its cost of goods sold equals:

Accepted Answer

A)  $(217,000) .
B)  $375,000.
C)  $157,500.
D)  $217,500.
E)  $532,500.F) None of the above
G) C) and D)

Question 16

Mega Skateboard Supplier had net sales of $2.8 million,its cost of goods sold was $1.6 million,and its net income was $0.9 million.Its gross margin ratio equals:

Accepted Answer

A)  32%.
B)  175%.
C)  43%.
D)  57%.
E)  56%.F) A) and E)
G) B) and C)

Question 17

From the adjusted trial balance for Brookstone Art Supplies given below,prepare a multiple-step income statement in good form.

Accepted Answer

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

Question 18

Austin's Pub Supply uses the 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.

Accepted Answer

The answer of Austin's Pub Supply uses the periodic inventory...

Question 19

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Accepted Answer

A)  $209,000 and $191,470
B)  $278,000 and $179,500
C)  $278,000 and $98,500
D)  $179,500 and $98,500
E)  $645,500 and $179,500F) A) and E)
G) C) and E)

Question 20

The gross margin ratio equals net sales less ___________ divided by net sales.

Accepted Answer

The answer of The gross margin ratio equals net sales...

Exam 5: Accounting for Merchandising Operations

The gross margin ratio equals net sales less ___________ divided by net sales.

Correct Answer
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Beginning inventory plus net purchases is:

Correct Answer
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KLM Corporation's quick assets are $5,888,000,its current assets are $11,700,000 and its current liabilities are $8,000,000.Its acid-test ratio equals:

Correct Answer
verified

From the adjusted trial balance for Brookstone Art Supplies given below,prepare a multiple-step income statement in good form.

Correct Answer
verified

A company has sales of $375,000 and its gross profit is $157,500.Its cost of goods sold equals:

Correct Answer
verified

A company purchases merchandise with a catalog price of $20,000.The company receives a 35% trade discount from the seller.The seller also offers credit terms of 2/10,n/30.Assuming no returns were made and that payment was made within the discount period,what is the net cost of the merchandise?

Correct Answer
verified

Zenith Company's Merchandise Inventory account at the end of year 2015 has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:

Correct Answer
verified

Correct Answer
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All of the following statements regarding inventory shrinkage are true except:

Correct Answer
verified

Austin's Pub Supply uses the 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.

Correct Answer
verified

The gross margin ratio:

Correct Answer
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Liquidity problems are likely to exist when a company's acid-test ratio:

Correct Answer
verified

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Correct Answer
verified

Merchandise inventory:

Correct Answer
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The operating cycle for a merchandiser that sells only for cash moves from:

Correct Answer
verified

A ___________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Correct Answer
verified

Sales less sales discounts less sales returns and allowances equals:

Correct Answer
verified

Mega Skateboard Supplier had net sales of $2.8 million,its cost of goods sold was $1.6 million,and its net income was $0.9 million.Its gross margin ratio equals:

Correct Answer
verified

Products that a company owns and intends to sell are called _____________________.

Correct Answer
verified
Merchandis...
View Answer

Correct Answer
verified

Exam 5: Accounting for Merchandising Operations

The gross margin ratio equals net sales less ___________ divided by net sales.

Correct AnswerverifiedShow Answer

Beginning inventory plus net purchases is:

Correct AnswerverifiedShow Answer

KLM Corporation's quick assets are $5,888,000,its current assets are $11,700,000 and its current liabilities are $8,000,000.Its acid-test ratio equals:

Correct AnswerverifiedShow Answer

From the adjusted trial balance for Brookstone Art Supplies given below,prepare a multiple-step income statement in good form.

Correct AnswerverifiedShow Answer

A company has sales of $375,000 and its gross profit is $157,500.Its cost of goods sold equals:

Correct AnswerverifiedShow Answer

A company purchases merchandise with a catalog price of $20,000.The company receives a 35% trade discount from the seller.The seller also offers credit terms of 2/10,n/30.Assuming no returns were made and that payment was made within the discount period,what is the net cost of the merchandise?

Correct AnswerverifiedShow Answer

Zenith Company's Merchandise Inventory account at the end of year 2015 has a balance of $91,820,but a physical count reveals that only $90,450 of inventory exists.The adjusting entry to record this $1,370 of inventory shrinkage is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following statements regarding inventory shrinkage are true except:

Correct AnswerverifiedShow Answer

Austin's Pub Supply uses the 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.

Correct AnswerverifiedShow Answer

The gross margin ratio:

Correct AnswerverifiedShow Answer

Liquidity problems are likely to exist when a company's acid-test ratio:

Correct AnswerverifiedShow Answer

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Correct AnswerverifiedShow Answer

Merchandise inventory:

Correct AnswerverifiedShow Answer

The operating cycle for a merchandiser that sells only for cash moves from:

Correct AnswerverifiedShow Answer

A ___________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Correct AnswerverifiedShow Answer

Sales less sales discounts less sales returns and allowances equals:

Correct AnswerverifiedShow Answer

Mega Skateboard Supplier had net sales of $2.8 million,its cost of goods sold was $1.6 million,and its net income was $0.9 million.Its gross margin ratio equals:

Correct AnswerverifiedShow Answer

Products that a company owns and intends to sell are called _____________________.

Correct AnswerverifiedMerchandis...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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Merchandis...
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