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Exam 6: Accounting for Merchandising Businesses

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Question 101

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Under the periodic inventory system,the journal entry to record the purchase of merchandise inventory will include a debit to

A) Merchandise Inventory
B) Purchases
C) Accounts Payable
D) Cost of Merchandise Purchased

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

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Question 102

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To encourage a buyer to pay before the end of the credit period,the seller may offer a

A) purchases discount
B) sales discount
C) trade discount
D) payment discount

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

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Question 103

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Record the following transactions for Sparky's Pet Shop using the general journal form provided below.Assume Sparky's uses a perpetual inventory system.Omit transaction descriptions from entries.​

The records of Penny Co.indicated that $415,000 of merchandise should be on hand on December 31.The physical inventory indicates that $370,000 of merchandise is actually on hand.Journalize the adjusting entry for the inventory shrinkage for the year ended December 31.

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of a period.During the period,merchandise costing $635 is purchased.At year-end,merchandise inventory costing $160 is on hand.The cost of merchandise sold for the year is

In recording the cost of merchandise sold for cash,based on data available from perpetual inventory records,the journal entry is a

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.

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

Calculate income from operations for Jonas Company based on the following data:

Other income and expenses are items that are not related to the primary operating activity.

Merchandise Inventory normally has a debit balance.

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called a cash discount.

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

Using the letter preceding each account,arrange the following selected accounts in the order they would normally appear in a chart of accounts of a company that uses a multiple-step income statement.

Match each of the following terms (a-h) with the correct definition below. -Statement where net income is determined by deducting all expenses from all revenues.

Bountiful Company had sales of $650,000 and cost of merchandise sold of $200,000 during the year.The total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000.Calculate the ratio of sales to total assets.

When comparing a retail business to a service business,the financial statement that changes the least is the

Title to merchandise shipped FOB shipping point passes to the buyer upon delivery of the merchandise to the buyer's place of business.

A retailer purchases merchandise with a catalog list price of $30,000.The retailer receives a 15% trade discount and has credit terms of 2/10,n/30.How much cash will be needed to pay this invoice within the discount period?

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