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 1

True/False

Review LaterAdd Note

Review Later

A seller may grant a buyer a reduction in selling price and this is called a customer discount.

A) True
B) False

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

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

A) sales on account
B) sales returns
C) cash sales
D) sales when the credit card company remits the cash

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

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Merchandise subject to terms 2/10,n/30,FOB shipping point,is sold on account to a customer for $25,000.What is the amount of the sales discount allowable?

Which of the following accounts has a normal credit balance?

When merchandise is sold for $600 plus 6% sales tax,the Sales account should be credited for $636.

Which of the following items would not affect the cost of merchandise inventory acquired during the period?

The form of the balance sheet in which assets,liabilities,and stockholders' equity are presented in a downward sequence is called the report form.

Using a perpetual inventory system,the entry to record the purchase of $30,000 of merchandise on account would include a

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be

In the merchandising income statement,sales will be reduced by administrative expenses to arrive at operating income.

Gadget Palace is a retailer selling unique hardware.Gadget Palace uses a perpetual inventory system.Journalize the following transactions: On July 5,Gadget Palace purchases inventory for sale from Turbo Tools for $11,400.00 with terms 2/10,n/30. On July 6,Gadget Palace pays Fast Truck Transport $75.00 for freight-in on the July 5 order. On July 8,Gadget Palace receives a credit memo from Turbo Tools for $215.00 for damaged merchandise. On July 15,Gadget Palace pays Turbo Tools the balance due.

Merchandise is sold for cash.The selling price of the merchandise is $6,000 and the sale is subject to a 7% state sales tax.The journal entry to record the sale would include a credit to

Based upon the following data for a business with a periodic inventory system,determine the cost of merchandise sold for August.

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer,the terms are

Prepare a multiple-step income statement for Armstrong Co.from the following data for the year ended December 31. Sales,$755,000; cost of merchandise sold,$330,000; administrative expenses,$35,000; interest expense,$30,000; rent revenue,$25,000; selling expenses,$50,000.

In a multiple-step income statement,the dollar amount for income from operations is always the same as net income.

Freight-in is considered a cost of purchasing inventory.

There is no difference between the recording of cash sales and the recording of MasterCard or VISA sales.