Question 1

When purchases of merchandise are made on account with a perpetual inventory system,the transaction is recorded with which entry?

Accepted Answer

A)  debit Accounts Payable; credit Merchandise Inventory
B)  debit Merchandise Inventory; credit Accounts Payable
C)  debit Merchandise Inventory; credit Cash Discounts
D)  debit Merchandise Inventory; credit PurchasesE) C) and D)
F) A) and D)

Question 2

Under the periodic inventory system,the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 3

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies.Bargain Wholesalers uses a perpetual inventory.Journalize the following transactions:​​  ​

Accepted Answer

The answer of Bargain Wholesalers sells pet supplies to retailers...

Question 4

Which of the following accounts has a normal debit balance?

Accepted Answer

A)  Accounts Payable
B)  Merchandise Inventory
C)  Sales
D)  Interest RevenueE) A) and B)
F) A) and C)

Question 5

Under a perpetual inventory system,

Accepted Answer

A)  accounting records continuously disclose the amount of inventory
B)  increases in inventory resulting from purchases are debited to Purchases
C)  a physical count is required to determine cost of merchandise on hand
D)  the purchases returns and allowances account is credited when goods are returned to vendorsE) None of the above
F) B) and D)

Question 6

Using the following information,what is the amount of gross profit?​​  ​

Accepted Answer

A)  $25,300
B)  $31,670
C)  $30,600
D)  $62,840E) C) and D)
F) B) and D)

Question 7

A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year,$3,600; Freight In,$650; Purchases,$10,700; Purchases Returns and Allowances,$1,950; Purchases Discounts,$330.The cost of merchandise purchased is equal to

Accepted Answer

A)  $12,670
B)  $9,070
C)  $8,420
D)  $17,230E) A) and B)
F) A) and C)

Question 8

Cumberland Co.sells $2,000 of inventory to Hancock Co.for cash.Cumberland paid $1,250 for the merchandise.Under a perpetual inventory system,which of the following journal entry (ies) would be recorded?

Accepted Answer

A)  debit Cash, $2,000; credit Merchandise Inventory, $1,250
B)  debit Cash, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250
C)  debit Cash, $1,250; credit Sales, $1,250
D)  debit Accounts Receivable, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250E) A) and D)
F) None of the above

Question 9

Which of the following accounts has a normal credit balance?

Accepted Answer

A)  Accounts Receivable
B)  Sales
C)  Merchandise Inventory
D)  Delivery ExpenseE) B) and C)
F) None of the above

Question 10

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

Accepted Answer

A)  selling expenses
B)  general expenses
C)  other expenses
D)  administrative expensesE) A) and B)
F) A) and C)

Question 11

Emma Co.sold to Isabella Co.merchandise on account FOB shipping point,2/10,net 30,for $15,000.Emma Co.prepaid the $750 shipping charge.Using the perpetual inventory method,which of the following entries will Isabella Co.make to record the payment for the merchandise if Isabella Co.pays within the discount period?

Accepted Answer

A)  Accounts Payable-Emma Co., debit $15,000; Cash, credit $15,000
B)  Accounts Payable-Emma Co., debit $15,450; Cash, credit $15,450
C)  Accounts Payable-Emma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750
D)  Accounts Payable-Emma Co., debit $15,750; Merchandise Inventory, debit $300; Cash, credit $16,050E) A) and B)
F) A) and C)

Question 12

As we compare a merchandise business to a service business,the financial statement that changes the most is the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 6: Accounting for Merchandising Businesses

Which of the following accounts has a normal debit balance?

Correct Answer
verified

Using the following information,what is the amount of gross profit?

Correct Answer
verified

When purchases of merchandise are made on account with a perpetual inventory system,the transaction is recorded with which entry?

Correct Answer
verified

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

Correct Answer
verified

Which of the following accounts has a normal credit balance?

Correct Answer
verified

As we compare a merchandise business to a service business,the financial statement that changes the most is the balance sheet.

Correct Answer
verified

Under the periodic inventory system,the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory.

Correct Answer
verified

Under a perpetual inventory system,

Correct Answer
verified

Cumberland Co.sells $2,000 of inventory to Hancock Co.for cash.Cumberland paid $1,250 for the merchandise.Under a perpetual inventory system,which of the following journal entry (ies) would be recorded?

Correct Answer
verified

A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year,$3,600; Freight In,$650; Purchases,$10,700; Purchases Returns and Allowances,$1,950; Purchases Discounts,$330.The cost of merchandise purchased is equal to

Correct Answer
verified

Correct Answer
verified

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies.Bargain Wholesalers uses a perpetual inventory.Journalize the following transactions:

Correct Answer
verified

Exam 6: Accounting for Merchandising Businesses

Which of the following accounts has a normal debit balance?

Correct AnswerverifiedShow Answer

Using the following information,what is the amount of gross profit?​​ ​

Correct AnswerverifiedShow Answer

When purchases of merchandise are made on account with a perpetual inventory system,the transaction is recorded with which entry?

Correct AnswerverifiedShow Answer

Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as

Correct AnswerverifiedShow Answer

Which of the following accounts has a normal credit balance?

Correct AnswerverifiedShow Answer

As we compare a merchandise business to a service business,the financial statement that changes the most is the balance sheet.

Correct AnswerverifiedShow Answer

Under the periodic inventory system,the cost of merchandise sold is equal to the beginning merchandise inventory plus the cost of merchandise purchased plus the ending merchandise inventory.

Correct AnswerverifiedShow Answer

Under a perpetual inventory system,

Correct AnswerverifiedShow Answer

Cumberland Co.sells $2,000 of inventory to Hancock Co.for cash.Cumberland paid $1,250 for the merchandise.Under a perpetual inventory system,which of the following journal entry (ies) would be recorded?

Correct AnswerverifiedShow Answer

A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year,$3,600; Freight In,$650; Purchases,$10,700; Purchases Returns and Allowances,$1,950; Purchases Discounts,$330.The cost of merchandise purchased is equal to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies.Bargain Wholesalers uses a perpetual inventory.Journalize the following transactions:​​ ​

Correct AnswerverifiedShow Answer

Correct Answer
verified

Using the following information,what is the amount of gross profit?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies.Bargain Wholesalers uses a perpetual inventory.Journalize the following transactions:

Correct Answer
verified