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Exam 5: Accounting for Retail Businesses

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Question 51

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From the following list, identify accounts that will be closed at the end of the fiscal period. (a) Advertising Expense (b) Cash (c) Accounts Receivable (d) Salaries Expense (e) Cost of Goods Sold (f) Dividends (g) Accumulated Depreciation-Building (h) Interest Expense (i) Sales Tax Payable

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(a), (d), (e), (f), ...

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Question 52

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If the physical count of inventory revealed $158,000 of inventory on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?

A) debit Inventory, $158,000; credit Cost of Goods Sold, $158,000
B) debit Inventory, $5,000; credit Cost of Goods Sold, $5,000
C) debit Cost of Goods Sold, $163,000; credit Inventory, $158,000
D) debit Cost of Goods Sold, $5,000; credit Inventory, $5,000

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

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Question 53

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Which of the following accounts has a normal credit balance?

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

Calculate the gross profit for Jonas Company based on the following data:

Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?

Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows: ​ ​ Assume that Austin Maxwell pays his $400 receivable on January 3, taking the 2 percent discount to which he is entitled. Journalize the entry to record the transaction.

Which of the following items should not be included in the cost of ending inventory?

Which of the following accounts will not be found in the Cost of Goods Sold section of the income statement for a company using the periodic inventory method?

Which of the following is ,ot a difference between a retail business and a service business?

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

In a periodic inventory system, the cost of merchandise purchased includes the cost of freight in.

Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

What is the term applied to the excess of sales over the cost of goods sold?

Merchandise is ordered on November 10; the merchandise is shipped by the seller and the invoice is prepared, dated, and mailed by the seller on November 13; the merchandise is received by the buyer on November 18; the entry is made in the buyer's accounts on November 20. The credit period begins with what date?

The following selected accounts and their current balances appear in the ledger of Fernandez Co. at the end of its fiscal year. -What are total operating expenses for Fernandez Co.?

Under the periodic inventory system, the cost of goods sold is recorded when sales are made.

When a large quantity of merchandise is purchased, a reduction allowed on the sale price is called a trade discount.

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

Journalize the entries to record the following selected transactions: