Question 1

Assume that Swann Company uses a periodic inventory system and has these account balances: Purchases $630000; Purchase Returns and Allowances $25000; Purchase Discounts $11000; and Freight-In $19000; beginning inventory of $45000; ending inventory of $55000; and net sales of $750000. Determine the cost of goods sold.

Accepted Answer

None...

Question 2

Which one of the following is shown on a multiple-step but not on a single-step income statement?

Accepted Answer

A)   Net sales
B)   Net income
C)   Gross profit
D)   Cost of goods soldE) B) and D)
F) A) and C)

Question 3

Sales revenue should be recorded in accordance with the matching principle.

Accepted Answer

A) True 
 B)False

Question 4

Two categories of expenses for merchandising companies are

Accepted Answer

A)   cost of goods sold and financing expenses.
B)   operating expenses and financing expenses.
C)   cost of goods sold and operating expenses.
D)   sales and cost of goods sold.E) B) and D)
F) A) and D)

Question 5

The Inventory account balance appearing in a perpetual inventory worksheet represents the

Accepted Answer

A)   ending inventory.
B)   beginning inventory.
C)   cost of merchandise purchased.
D)   cost of merchandise sold.E) All of the above
F) B) and D)

Question 6

If a company determines cost of goods sold each time a sale occurs it

Accepted Answer

A)   must have a computer accounting system.
B)   uses a combination of the perpetual and periodic inventory systems.
C)   uses a periodic inventory system.
D)   uses a perpetual inventory system.E) A) and C)
F) A) and B)

Question 7

Mantle Company's accounting records show the following at the year ending on December 31 2016:   Purchase Discounts $16,500 Freight - In 22,100 Purchases 413,000 Beginning Inventory 47,000 Ending Inventory 57,600 Purchase Returns 15,600\begin{array} { l r } 	ext { Purchase Discounts } & \$ 16,500 \	ext { Freight - In } & 22,100 \	ext { Purchases } & 413,000 \	ext { Beginning Inventory } & 47,000 \	ext { Ending Inventory } & 57,600 \	ext { Purchase Returns } & 15,600\end{array} Purchase Discounts  Freight - In  Purchases  Beginning Inventory  Ending Inventory  Purchase Returns ​$16,50022,100413,00047,00057,60015,600​  Using the periodic system the cost of goods purchased is

Accepted Answer

A)   $380900.
B)   $423000.
C)   $403000.
D)   $413600. E) B) and C)
F) A) and D)

Question 8

For the income statement IFRS requires

Accepted Answer

A)   single-step approach.
B)   multiple-step approach.
C)   single-step approach or multiple-step approach.
D)   no specific income statement approach.E) A) and B)
F) All of the above

Question 9

On July 9 Elijah Company sells goods on credit to Miley Company for $7000 terms 1/10 n/60. Elijah receives payment on July 18. The entry by Elijah on July 18 is: a. 
$\begin{array}{lrr}
  \text {  Cash } &7,000\
 \text {  Accounts Receivable} & &7,000\
\end{array}$

b. 
$\begin{array}{lrr}
  \text {  Cash} &7,000\
 \text {Sales Discounts  } &&70\
 \text { Accounts Receivable  } &&6,930
\end{array}$

c. 
$\begin{array}{lrr}
  \text { Cash } &6,930\
 \text { Sales Discounts } &70\
 \text { Accounts Receivable } &&7,000
\end{array}$

d. 
$\begin{array}{lrr}
  \text {Cash  } &7,070\
 \text { Sales Discounts } &&70\
 \text { Accounts Receivable } &&7,000
\end{array}$

Accepted Answer

The answer of On July 9 Elijah Company sells goods...

Question 10

Gross profit for a merchandiser is net sales minus

Accepted Answer

A)   operating expenses.
B)   cost of goods sold.
C)   sales discounts.
D)   cost of goods available for sale.E) A) and C)
F) All of the above

Question 11

A sales invoice is a source document that

Accepted Answer

A)   provides support for goods purchased for resale.
B)   provides evidence of incurred operating expenses.
C)   provides evidence of credit sales.
D)   serves only as a customer receipt.E) B) and C)
F) A) and C)

Question 12

During 2016 Wu Han Co. generated revenues of $95000. The company's expenses were as follows: cost of goods sold of $47000 operating expenses of $16000 and a loss on the sale of equipment of $5000. Wu Han's income from operations is

Accepted Answer

A)   $37000.
B)   $32000.
C)   $48000.
D)   $95000.E) A) and B)
F) B) and C)

Question 13

Financial information is presented below:   Operating Expenses $90,000 Sales Returns and Allowances 25,000 Sales Discounts 15,000 Sales Revenue 400,000 Cost of Goods Sold 212,400\begin{array} { l r } 	ext { Operating Expenses } & \$ 90,000 \	ext { Sales Returns and Allowances } & 25,000 \	ext { Sales Discounts } & 15,000 \	ext { Sales Revenue } & 400,000 \	ext { Cost of Goods Sold } & 212,400\end{array} Operating Expenses  Sales Returns and Allowances  Sales Discounts  Sales Revenue  Cost of Goods Sold ​$90,00025,00015,000400,000212,400​  The gross profit rate would be

Accepted Answer

A)   .590.
B)   .410.
C)   .469.
D)   .531. E) B) and C)
F) A) and D)

Question 14

Which of the following is a true statement about inventory systems?

Accepted Answer

A)   Periodic inventory systems require more detailed inventory records.
B)   Perpetual inventory systems require more detailed inventory records.
C)   A periodic system requires cost of goods sold be determined after each sale.
D)   A perpetual system determines cost of goods sold only at the end of the accounting period.E) A) and B)
F) B) and D)

Question 15

Financial information is presented below:   Operating Expenses $90,000 Sales Returns and Allowances 25,000 Sales Discounts 15,000 Sales 400,000 Cost of Goods Sold 212,400\begin{array} { l r } 	ext { Operating Expenses } & \$ 90,000 \	ext { Sales Returns and Allowances } & 25,000 \	ext { Sales Discounts } & 15,000 \	ext { Sales } & 400,000 \	ext { Cost of Goods Sold } & 212,400\end{array} Operating Expenses  Sales Returns and Allowances  Sales Discounts  Sales  Cost of Goods Sold ​$90,00025,00015,000400,000212,400​  Gross profit would be

Accepted Answer

A)   $147600.
B)   $57600.
C)   $270000.
D)   $187600. E) All of the above
F) A) and B)

Question 16

The operating cycle of a merchandiser is

Accepted Answer

A)   always one year in length.
B)   generally longer than it is for a service company.
C)   about the same as for a service company.
D)   generally shorter than it is for a service company.E) A) and D)
F) All of the above

Question 17

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.

Accepted Answer

A)   Gross profit
B)   Operating expenses
C)   Sales revenues
D)   Cost of goods soldE) A) and B)
F) All of the above

Question 18

Financial information is presented below: Operating Expenses  $65,000\quad \$ 65,000$65,000 
Sales Revenue  220,000\quad \quad \quad 220,000220,000 
Cost of Goods Sold  138,000\quad 138,000138,000  The gross profit rate would be

Accepted Answer

A)   .077.
B)   .400.
C)   .627.
D)   .923. E) C) and D)
F) A) and D)

Question 19

Under a perpetual inventory system inventory shrinkage and lost or stolen goods are more readily determined.

Accepted Answer

A) True 
 B)False

Question 20

Freight costs paid by a seller on merchandise sold to customers will cause an increase

Accepted Answer

A)   in the selling expense of the buyer.
B)   in operating expenses for the seller.
C)   to the cost of goods sold of the seller.
D)   to a contra-revenue account of the seller.E) C) and D)
F) B) and C)

Exam 5: Accounting for Merchandising Operations

A sales invoice is a source document that

Correct Answer
verified

Under a perpetual inventory system inventory shrinkage and lost or stolen goods are more readily determined.

Correct Answer
verified

Gross profit for a merchandiser is net sales minus

Correct Answer
verified

Which of the following is a true statement about inventory systems?

Correct Answer
verified

Freight costs paid by a seller on merchandise sold to customers will cause an increase

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Financial information is presented below: $\begin{array} { l r } \text { Operating Expenses } & \$ 90,000 \\\text { Sales Returns and Allowances } & 25,000 \\\text { Sales Discounts } & 15,000 \\\text { Sales } & 400,000 \\\text { Cost of Goods Sold } & 212,400\end{array}$ Gross profit would be

Correct Answer
verified

If a company determines cost of goods sold each time a sale occurs it

Correct Answer
verified

The Inventory account balance appearing in a perpetual inventory worksheet represents the

Correct Answer
verified

Correct Answer
verified

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.

Correct Answer
verified

Financial information is presented below: Operating Expenses $\quad \$ 65,000$ Sales Revenue $\quad \quad \quad 220,000$ Cost of Goods Sold $\quad 138,000$ The gross profit rate would be

Correct Answer
verified

During 2016 Wu Han Co. generated revenues of $95000. The company's expenses were as follows: cost of goods sold of $47000 operating expenses of $16000 and a loss on the sale of equipment of $5000. Wu Han's income from operations is

Correct Answer
verified

For the income statement IFRS requires

Correct Answer
verified

Two categories of expenses for merchandising companies are

Correct Answer
verified

The operating cycle of a merchandiser is

Correct Answer
verified

Sales revenue should be recorded in accordance with the matching principle.

Correct Answer
verified

Correct Answer
verified
None...
View Answer

Which one of the following is shown on a multiple-step but not on a single-step income statement?

Correct Answer
verified

Exam 5: Accounting for Merchandising Operations

A sales invoice is a source document that

Correct AnswerverifiedShow Answer

Under a perpetual inventory system inventory shrinkage and lost or stolen goods are more readily determined.

Correct AnswerverifiedShow Answer

Gross profit for a merchandiser is net sales minus

Correct AnswerverifiedShow Answer

Which of the following is a true statement about inventory systems?

Correct AnswerverifiedShow Answer

Freight costs paid by a seller on merchandise sold to customers will cause an increase

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a company determines cost of goods sold each time a sale occurs it

Correct AnswerverifiedShow Answer

The Inventory account balance appearing in a perpetual inventory worksheet represents the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.

Correct AnswerverifiedShow Answer

Financial information is presented below: Operating Expenses $65,000\quad \$ 65,000$65,000 Sales Revenue 220,000\quad \quad \quad 220,000220,000 Cost of Goods Sold 138,000\quad 138,000138,000 The gross profit rate would be

Correct AnswerverifiedShow Answer

During 2016 Wu Han Co. generated revenues of $95000. The company's expenses were as follows: cost of goods sold of $47000 operating expenses of $16000 and a loss on the sale of equipment of $5000. Wu Han's income from operations is

Correct AnswerverifiedShow Answer

For the income statement IFRS requires

Correct AnswerverifiedShow Answer

Two categories of expenses for merchandising companies are

Correct AnswerverifiedShow Answer

The operating cycle of a merchandiser is

Correct AnswerverifiedShow Answer

Sales revenue should be recorded in accordance with the matching principle.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

Which one of the following is shown on a multiple-step but not on a single-step income statement?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Financial information is presented below: Operating Expenses $\quad \$ 65,000$ Sales Revenue $\quad \quad \quad 220,000$ Cost of Goods Sold $\quad 138,000$ The gross profit rate would be

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
None...
View Answer

Correct Answer
verified