Recent Question

Which of the following accounts has a normal credit 1. The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be a. Accounts Payable Purchase Returns and Allowances b. Purchase Returns and Allowances Accounts Payable c. Accounts Payable Inventory d. Inventory Accounts Payable 2. Under a periodic inventory system, acquisition of merchandise is debited to the a. Merchandis ...

Other / Other 01 Apr 2016

Two categories of expenses for merchandising companies 1. Income from operations is gross profit less a. administrative expenses. b. operating expenses. c. other expenses and losses. d. selling expenses. 2. An enterprise which sells goods to customers is known as a a. proprietorship. b. corporation. c. retailer. d. service firm. 3. Which of the following would not be considered a merchandising company? a. Retailer b. Wholesale ...

Other / Other 01 Apr 2016

The journal entry to record a return of merchandise 1. Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account. 2. The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. ...

Other / Other 01 Apr 2016

Gross profit represents the merchandising 1. If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is 25%. 2. Gross profit represents the merchandising profit of a company. 3. Gross profit is a measure of the overall profitability of a company. 4. Gross profit rate is computed by dividing cost of goods sold by net sales. 5. Purchase Returns and Allowances and Purchase Discounts are subtracted from Purchases ...

Other / Other 01 Apr 2016

A company's unadjusted balance in Merchandise Inventory 1. Sales Allowances and Sales Discounts are both designed to encourage customers to pay their accounts promptly. 2. To grant a customer a sales return, the seller credits Sales Returns and Allowances. 3. A company's unadjusted balance in Merchandise Inventory will usually not agree with the actual amount of inventory on hand at year-end. 4. For a merchandising company, all account ...

Other / Other 01 Apr 2016

A perpetual inventory system would likely be used by 1. Detailed records of goods held for resale are not maintained under a a. perpetual inventory system. b. periodic inventory system. c. double entry accounting system. d. single entry accounting system. 2. A perpetual inventory system would likely be used by a(n) a. automobile dealership. b. hardware store. c. drugstore. d. convenience store. 3. Which of the following is a true ...

Other / Other 01 Apr 2016

Jake’s Market recorded the following events 1. In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to a. Merchandise Inventory. b. Purchase Discounts. c. Purchase Allowance. d. Sales Discounts. 2. Zach’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $50,000, terms 2/10, n/30 ...

Other / Other 01 Apr 2016

Sales revenues are usually considered earned 1. In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold. 2. Sales revenues are usually considered earned when a. cash is received from credit sales. b. an ...

Other / Other 01 Apr 2016

A credit memorandum is used as documentation 1. A credit memorandum is prepared when a. an employee does a good job. b. goods are sold on credit. c. goods that were sold on credit are returned. d. customers refuse to pay their accounts. 2. The Sales Returns and Allowances account is classified as a(n) a. asset account. b. contra asset account. c. expense account. d. contra revenue account. 3. A credit memorandum is used as docum ...

Other / Other 01 Apr 2016

Sales minus operating expenses equals gross profit 1. Retailers and wholesalers are both considered merchandisers. 2. The steps in the accounting cycle are different for a merchandising company than for a service company. 3. Sales minus operating expenses equals gross profit. 4. Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs. 5. A periodic inventory system requires a detailed inventory ...

Other / Other 01 Apr 2016