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 91

True/False

Review LaterAdd Note

Review Later

Income that cannot be associated definitely with operations,such as a gain from the sale of a fixed asset,is listed as Other Income on the multiple-step income statement.

A) True
B) False

Correct Answer

verified

Show Answer

Question 92

True/False

Review LaterAdd Note

Review Later

Most retailers record all credit card sales as credit sales.

A) True
B) False

Correct Answer

verified

Show Answer

Question 93

Multiple Choice

Review LaterAdd Note

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

If merchandise sells for $3,500,with terms of 3/15,n/45 and the cost of the inventory sold is $2,100,the amount charged to sales is

Using the following information,what is the cost of merchandise sold?

During the current year,merchandise is sold for $117,500 cash and $241,750 on account.The cost of the merchandise sold is $157,400.What is the amount of the gross profit?

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the 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

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

Merchandise with a sales price of $5,000 is sold on account with terms 2/10,n/30.The journal entry to record the sale would include a

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

Under a periodic inventory system,the cost of merchandise on hand at the end of the year is determined by a physical count of the inventory.

A customer discount encourages customers to pay accounts more quickly than if a discount were not available.

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

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?

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,determine the gross profit to be reported on the income statement for the year ended March 31.

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

The chart of accounts for a merchandising business would include an account called Delivery Expense.

Complete the following data taken from the condensed income statements for merchandising Companies A,B,and C. $\begin{array}{|l|r|r|r|}\hline & \text { Company A } & \text { Company B } & \text { Company C } \\\hline \text { Net income } & \$ 315 & \$ ? & \$ 215 \\\hline \text { Sales } & ? & 865 & 560 \\\hline \text { Gross profit } & 430 & ? & 325 \\\hline \text { Operating expenses } & ? & 125 & ? \\\hline \text { Cost of merchandise sold } & 545 & 320 & ? \\\hline\end{array}$

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

The cost of merchandise inventory is limited to the purchase price less any purchase discounts.