Question 1

FOB _________________ means the buyer accepts ownership when the goods depart the seller's place of business.The buyer is responsible for paying shipping costs and bears the risk of damage or loss when goods are in transit.

Accepted Answer

The answer of FOB _________________ means the buyer accepts ownership...

Question 2

Beginning inventory plus the net cost of purchases is the _____________________.

Accepted Answer

The answer of Beginning inventory plus the net cost of...

Question 3

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business.The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

Accepted Answer

The answer of FOB _________________ means ownership of goods transfers...

Question 4

By borrowing the money on the last day of the discount period and repaying it on the last day of the credit period,the loan would be outstanding for 20 days (30-10).Interest on the loan is calculated at 9% for 20 days.The amount saved is the difference between the discount received for paying on time and the amount of interest expense that would be paid to the bank.

Accepted Answer

The answer of By borrowing the money on the last...

Question 5

Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment,which applies the perpetual inventory system.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 6

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 7

A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

Accepted Answer

The answer of A ___________ is an intermediary that buys...

Question 8

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Accepted Answer

The answer of The __________________ inventory system continually updates accounting...

Question 9

The gross margin ratio equals net sales less ___________ divided by net sales.

Accepted Answer

The answer of The gross margin ratio equals net sales...

Question 10

A ________________ company's operating cycle begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

Accepted Answer

The answer of A ________________ company's operating cycle begins with...

Question 11

A buyer issues a _______________________ to inform the seller of a debit made to the seller's account payable in the buyer's records.

Accepted Answer

The answer of A buyer issues a _______________________ to inform...

Question 12

Vincent Company purchased merchandise from Liu Company with an invoice price of $300,000 and credit terms of 2/10,n/30.Liu Company's cost for the merchandise was $200,000.Vincent Company paid within the discount period.Assume that both buyer and seller use a perpetual inventory system.
1.Prepare entries that Vincent should record for (a)the purchase and (b)the cash payment.
2.Prepare entries that Liu should record for (a)the sale and (b)the cash collection.
3.Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 9% and paid it back on the last day of the credit period.Compute how much the buyer saved by following this strategy.(Assume a 365-day year and round dollar amounts to the nearest cent. )

Accepted Answer

The answer of Vincent Company purchased merchandise from Liu Company...

Question 13

The liquidity of a company can be measured using the current ratio and the ____________________,which only includes the most liquid current assets in its calculation.

Accepted Answer

The answer of The liquidity of a company can be...

Question 14

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 15

Merchandise that customers return to the seller after a sale is referred to as ___________________.

Accepted Answer

The answer of Merchandise that customers return to the seller...

Question 16

From the adjusted trial balance given below for the Grayson Company,prepare a multiple-step income statement in good form.Salaries expense and building depreciation expense should be equally divided between selling activities and the general and administrative activities.

Accepted Answer

The answer of From the adjusted trial balance given below...

Question 17

_________________ are the amounts and timing of payment from a buyer to a seller.

Accepted Answer

The answer of _________________ are the amounts and timing of...

Question 18

A period's beginning inventory is equal to the prior period's ___________________.

Accepted Answer

The answer of A period's beginning inventory is equal to...

Question 19

Products that a company owns and intends to sell are called _____________________.

Accepted Answer

The answer of Products that a company owns and intends...

Question 20

A ___________ inventory system updates the accounting record for inventory only at the end of an accounting period.

Accepted Answer

The answer of A ___________ inventory system updates the accounting...

Quiz 5: Accounting for Merchandising Operations

FOB _________________ means the buyer accepts ownership when the goods depart the seller's place of business.The buyer is responsible for paying shipping costs and bears the risk of damage or loss when goods are in transit.

Beginning inventory plus the net cost of purchases is the _____________________.

FOB _________________ means ownership of goods transfers to the buyer when the goods arrive at the buyer's place of business.The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit.

Prepare journal entries to record the following merchandise transactions of Martinez Excavation Equipment,which applies the perpetual inventory system.

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

The gross margin ratio equals net sales less ___________ divided by net sales.

A ________________ company's operating cycle begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

A buyer issues a _______________________ to inform the seller of a debit made to the seller's account payable in the buyer's records.

The liquidity of a company can be measured using the current ratio and the ____________________,which only includes the most liquid current assets in its calculation.

Prepare journal entries to record the following merchandising transactions of Margin Company,which applies the perpetual inventory system.Margin Company offers all of its credit customers credit terms of 2/10,n/30.

Merchandise that customers return to the seller after a sale is referred to as ___________________.

From the adjusted trial balance given below for the Grayson Company,prepare a multiple-step income statement in good form.Salaries expense and building depreciation expense should be equally divided between selling activities and the general and administrative activities.

_________________ are the amounts and timing of payment from a buyer to a seller.

A period's beginning inventory is equal to the prior period's ___________________.

Products that a company owns and intends to sell are called _____________________.

A ___________ inventory system updates the accounting record for inventory only at the end of an accounting period.