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Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. Pound Co. paid the invoice within the discount period. What is the sales amount to be recorded in the above transactions?


A) $25,500
B) $26,010
C) $24,990
D) $16,000

E) A) and D)
F) None of the above

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Who is responsible for the freight costs when the terms are FOB shipping point?


A) the ultimate customer
B) the buyer
C) the seller
D) either the seller or the buyer

E) None of the above
F) All of the above

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On March 15, Monroe Sales sells $9,525.00 on account to Garrison Brewer with terms of 2/10, n/30. The cost of goods sold was $6,905.00. (a) Journalize the sale and the recognition of the cost of the sale. (b) On March 20, a $125.00 credit memo is given to Garrison Brewer due to merchandise that was the wrong color. Journalize this event. The cost of the returned merchandise was $65.00. (c) On March 25, Garrison Brewer submits payment in full. Journalize this event.

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(a) blured image_TB228...

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The fees associated with credit card sales are periodically recorded as expenses.

A) True
B) False

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Merchandise is purchased for $6,000 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on September 12?


A) $6,120
B) $5,940
C) $6,090
D) $5,880

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

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

A) True
B) False

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

A) True
B) False

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False

Inventory shrinkage is recorded when


A) merchandise is returned by a buyer
B) merchandise purchased from a seller is incomplete or short
C) merchandise is returned to a seller
D) there is a difference between a physical count of inventory and inventory records

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

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Journalize the following transactions for Armour Inc. using both the periodic inventory system and the perpetual inventory system, presented in the side-by-side format of the form provided below. Oct.7 Sold $1,200 of merchandise on credit to Rondo Distributors, terms n/30; the cost of the merchandise was $720. Oct. 8 Purchased merchandise, $10,000; terms FOB shipping point and 2/15, n/30; with prepaid freight charges of $525 added to the invoice. Journalize the following transactions for Armour Inc. using both the periodic inventory system and the perpetual inventory system, presented in the side-by-side format of the form provided below. Oct.7 Sold $1,200 of merchandise on credit to Rondo Distributors, terms n/30; the cost of the merchandise was $720. Oct. 8 Purchased merchandise, $10,000; terms FOB shipping point and 2/15, n/30; with prepaid freight charges of $525 added to the invoice.

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When merchandise that was sold is returned, a credit to Customer Refunds Payable is made.

A) True
B) False

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Using the following data taken from Hsu's Imports Inc. which uses a periodic inventory system, prepare the cost of goods sold section of the income statement for the year ended March 31. ​ Using the following data taken from Hsu's Imports Inc. which uses a periodic inventory system, prepare the cost of goods sold section of the income statement for the year ended March 31. ​

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​ 11ea84e6_b01c_e731_9a63_1749a9302bb8_TB2281_00_TB2281_00

Which of the following accounts will only be found in the chart of accounts of a merchandising company?


A) Sales
B) Accounts Receivable
C) Inventory
D) Accounts Payable

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

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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 sales discount allowable?


A) $260
B) $500
C) $460
D) $150

E) All of the above
F) None of the above

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During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of the goods sold is $322,325. What is the amount of the gross profit?

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$137,500 +...

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The following data for the current year ended June 30 are from the accounting records of Zanadu Co.: The following data for the current year ended June 30 are from the accounting records of Zanadu Co.: ​ Prepare a multiple-step income statement for the year ended June 30. ​ Prepare a multiple-step income statement for the year ended June 30.

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

A) True
B) False

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Which of the following accounts carry a normal debit balance?


A) Sales Tax Payable, Inventory, Delivery Expense, and Customer Refunds Payable
B) Inventory, Delivery Expense, Cost of Goods Sold, and Estimated Returns Inventory
C) Inventory, Cost of Goods Sold, Customer Refunds Payable, and Sales
D) Delivery Expense, Customer Refunds Payable, Estimated Return Inventory, and Sales

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

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The entry to record the return of merchandise from a customer would include a


A) debit to Sales
B) credit to Sales
C) debit to Customer Refunds Payable
D) debit to Estimated Returns Inventory

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

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Assume that the total inventory on hand at the end of the year as determined by taking a physical inventory is $63,000. Excluded from the count were purchases of $6,000 in transit under FOB shipping point terms. What is the cost of inventory reported on the balance sheet?


A) $69,000
B) $63,000
C) $57,000
D) $55,000

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

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A

The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be


A)
 Cash 10,000 Inventory 10,000 Cost of Goods Sold 7,590 Sales 7,590\begin{array}{lr}\text { Cash } & 10,000 \\\quad \text { Inventory } & 10,000\\\text { Cost of Goods Sold } & 7,590 \\\quad \text { Sales } & 7,590\end{array}
B)
 Cash 10,000 Sales 10,000 Cost of Goods Sold 7,590 Inventory 7,590\begin{array}{lr}\text { Cash } & 10,000 \\\quad \text { Sales } & 10,000\\\text { Cost of Goods Sold } & 7,590 \\\quad \text { Inventory } & 7,590\end{array}
C)
The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be A) \begin{array}{lr} \text { Cash } & 10,000 \\ \quad \text { Inventory } & 10,000\\\text { Cost of Goods Sold } & 7,590 \\ \quad \text { Sales } & 7,590 \end{array} B) \begin{array}{lr} \text { Cash } & 10,000 \\ \quad \text { Sales } & 10,000\\\text { Cost of Goods Sold } & 7,590 \\ \quad \text { Inventory } & 7,590 \end{array} C) D)
D)
The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be A) \begin{array}{lr} \text { Cash } & 10,000 \\ \quad \text { Inventory } & 10,000\\\text { Cost of Goods Sold } & 7,590 \\ \quad \text { Sales } & 7,590 \end{array} B) \begin{array}{lr} \text { Cash } & 10,000 \\ \quad \text { Sales } & 10,000\\\text { Cost of Goods Sold } & 7,590 \\ \quad \text { Inventory } & 7,590 \end{array} C) D)

E) None of the above
F) B) and D)

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