FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Accounting for Merchandising Businesses

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

In recording the cost of merchandise sold for cash, based on data available from perpetual inventory records, the journal entry is

A) debit Cost of Merchandise Sold; credit Sales
B) debit Cost of Merchandise Sold; credit Merchandise Inventory
C) debit Merchandise Inventory; credit Cost of Merchandise Sold
D) debit Accounts Receivable; credit Merchandise Inventory

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

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

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) .

A) 1.75
B) 2.92
C) .34
D) .57

E) C) and D)
F) All of the above

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

Sales to customers who use nonbank credit cards, such as American Express, are generally treated as credit sales.

The following data for the current year ended June 30 were extracted from the accounting records of Excel Co.: Prepare a multiple-step income statement for the year ended June 30, 2014.

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

When a buyer returns merchandise purchased for cash, the buyer may record the transaction using the following entry

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

Merchandise Inventory normally has a debit balance.

Under the perpetual inventory system, all purchases of merchandise are debited to the account entitled

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.

Which of the following accounts usually has a debit balance?

Using the following information, what is the amount of merchandise available for sale?

Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the merchandise sold is $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?

Emma Co. sold 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 payment of the merchandise if Isabella Co. pays within the discount period?

If the buyer bears the freight costs related to a purchase, the terms are said to be FOB destination.

When merchandise that was sold is returned, a credit to sales returns and allowances is made.

Because many companies use computerized accounting systems, periodic inventory is widely used.

Complete the following data taken from the condensed income statements for merchandising Companies X, Y, & Z.

Cost of Merchandise Sold is often the largest expense on a merchandising company income statement.

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