Question Details

The operating cycle of a merchandiser 



1. A merchandising company using a perpetual system will make
a. the same number of adjusting entries as a service company does.
b. one more adjusting entry than a service company does.
c. one less adjusting entry than a service company does.
d. different types of adjusting entries compared to a service company.
2. In preparing closing entries for a merchandising company, the Income Summary account
will be credited for the balance of
a. sales.
b. merchandise inventory.
c. sales discounts.
d. freight-out.
3. A merchandising company using a perpetual system may record an adjusting entry by
a. debiting Income Summary.
b. crediting Income Summary.
c. debiting Cost of Goods Sold.
d. debiting Sales.
4. The operating cycle of a merchandiser is 
a. always one year in length.
b. generally longer than it is for a service company.
c. about the same as for a service company.
d. generally shorter than it is for a service company.
5. The sales revenue section of an income statement for a retailer would not include
a. Sales discounts.
b. Sales.
c. Net sales.
d. Cost of goods sold.




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