Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Details of a purchase invoice and related credit memo are summarized as follows:
​
  Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period.Determine the following:

Accepted Answer

The answer of Details of a purchase invoice and related...

Question 3

What type of company would normally offer trade discounts to its customers?

Accepted Answer

A)   service companies
B)   retailers
C)   wholesalers
D)   online retailersE) A) and B)
F) All of the above

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

Accepted Answer

A)   debit to Bank Credit Card Sales,debit to Credit Card Expense,and a credit to Sales
B)   debit to Cash and a credit to Sales
C)   debit to Cash,credit to Credit Card Expense,and a credit to Sales
D)   debit to Sales,debit to Credit Card Expense,and a credit to CashE) All of the above
F) A) and B)

Question 6

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

Accepted Answer

A)   consigned
B)   n / 30
C)   FOB shipping point
D)   FOB destinationE) C) and D)
F) All of the above

Question 7

Gross profit is equal to

Accepted Answer

A)   sales plus cost of goods sold
B)   sales plus selling expenses
C)   sales less selling expenses
D)   sales less cost of goods soldE) B) and D)
F) B) and C)

Question 8

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Accepted Answer

A)   n / 30
B)   FOB shipping point
C)   FOB destination
D)   consignedE) A) and D)
F) All of the above

Question 9

Where are selling and administrative expenses found on the multiple-step income statement?

Accepted Answer

A)   before gross profit
B)   after sales and before gross profit
C)   after net income and before expenses
D)   after gross profitE) B) and D)
F) All of the above

Question 10

When the seller offers a sales discount,even if borrowing has to be done,it is generally advantageous for the buyer to pay within the discount period.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)   sales on account
B)   sales returns
C)   cash sales
D)   sales when the credit card company remits the cashE) All of the above
F) A) and B)

Question 12

Estimated Returns Inventory is an account used when adjusting for expected merchandise sales in the next period.

Accepted Answer

A) True 
 B)False

Question 13

Using the following information,what is the amount of net income? ​
​

Accepted Answer

A)   $29,510
B)   $29,960
C)   $28,310
D)   $29,350E) A) and D)
F) None of the above

Question 14

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Accepted Answer

The answer of Describe the major differences in preparing the...

Question 15

In the periodic inventory system,purchases of merchandise for resale are debited to the Purchases account.

Accepted Answer

A) True 
 B)False

Question 16

On March 4,Micro Sales makes $4,850 in sales on bank credit cards which charge a 2.5% service charge and deposits the funds into Micro Sales' bank accounts at the end of the business day.Journalize the sales and recognition of expense.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> The sales are debited to cash...

Question 17

Sales is equal to the cost of goods sold less the gross profit.

Accepted Answer

A) True 
 B)False

Question 18

Most companies will not take a purchase discount,because 1% or 2% discounts are insignificant.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   debit to Accounts Payable
B)   debit to Inventory
C)   credit to Inventory
D)   credit to SalesE) All of the above
F) A) and C)

Question 20

Under the periodic inventory system,the journal entry to record the cost of goods sold at the point of sale will include which of the following?

Accepted Answer

A)   none of these
B)   Cost of Goods Sold
C)   Inventory
D)   PurchasesE) A) and D)
F) All of the above

Exam 5: Accounting for Merchandising Businesses

When the seller offers a sales discount,even if borrowing has to be done,it is generally advantageous for the buyer to pay within the discount period.

Correct AnswerverifiedShow Answer

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Correct AnswerverifiedShow Answer

What type of company would normally offer trade discounts to its customers?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most companies will not take a purchase discount,because 1% or 2% discounts are insignificant.

Correct AnswerverifiedShow Answer

Sales is equal to the cost of goods sold less the gross profit.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Where are selling and administrative expenses found on the multiple-step income statement?

Correct AnswerverifiedShow Answer

In the periodic inventory system,purchases of merchandise for resale are debited to the Purchases account.

Correct AnswerverifiedShow Answer

Details of a purchase invoice and related credit memo are summarized as follows: ​ Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period.Determine the following:

Correct AnswerverifiedShow Answer

Gross profit is equal to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Estimated Returns Inventory is an account used when adjusting for expected merchandise sales in the next period.

Correct AnswerverifiedShow Answer

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Correct AnswerverifiedShow Answer

On March 4,Micro Sales makes $4,850 in sales on bank credit cards which charge a 2.5% service charge and deposits the funds into Micro Sales' bank accounts at the end of the business day.Journalize the sales and recognition of expense.

Correct Answerverified The sales are debited to cash...View AnswerShow Answer

Using the following information,what is the amount of net income? ​ ​

Correct AnswerverifiedShow Answer

Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a

Correct AnswerverifiedShow Answer

Under the periodic inventory system,the journal entry to record the cost of goods sold at the point of sale will include which of the following?

Correct AnswerverifiedShow Answer

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Details of a purchase invoice and related credit memo are summarized as follows: Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period.Determine the following:

Correct Answer
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The sales are debited to cash...
View Answer

Using the following information,what is the amount of net income?

Correct Answer
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