FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Accounting for Merchandising Businesses

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

A) $970
B) $650
C) $300
D) $620

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

Correct Answer

verified

Show Answer

Question 52

True/False

Review LaterAdd Note

Review Later

A buyer who acquires merchandise under credit terms of 1/10, n/30 has 30days after the invoice date to take advantage of the cash discount.

A) True
B) False

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

The seller records the sales tax as part of the sales amount.

When comparing a retail business to a service business, the financial statement that changes the most is the

When comparing a retail business to a service business, the financial statement that changes the least is the

In the merchandising income statement, sales will be reduced by sales discounts and sales returns and allowances to arrive at net sales.

In a merchandise business, sales minus operating expenses equals net income.

The retained earnings statement shows

If the seller is to pay the freight costs of delivering merchandise, the delivery terms are stated as

Discounts taken by a buyer because of early payment are recorded on the seller's accounting records as a(n)

Taking advantage of a 2/10, n/30 purchases discount is equal to a savings yearly rate of approximately

The ratio of net sales to assets measures how effectively a business is using its assets to generate sales.

Which of the following accounts usually has a debit balance?

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system.

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

Isaac Co. sells merchandise on credit to Sonar Co in the amount of $9,600. The invoice is dated on April 15 with terms of 1/15, net 45. If Sonar Co. chooses not to take the discount, by when should the payment be made?

Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as credit sales.

If the merchandise costs $5,000, insurance in transit costs $250, tariff costs $75, processing the purchase order by the purchasing department costs $25, and the company receiving dock personnel cost $20, what is the total cost charged to the merchandise?

Service businesses provide services for income, while a merchandising business sells merchandise.

During the current year, merchandise is sold for $117,500 cash and $241,750 on account. The cost of the merchandise sold is $157,400. What is the amount of the gross profit?