Question 1

A company had cash sales of $49,527,credit sales of $38,540,sales returns and allowances of $7,100 and sales discounts of $4,375.The company's net sales for this period equal:

Accepted Answer

$49,527 + $38,540 - $7,100 - $4,375 = $76,592

Question 2

Which of the following accounts would be closed out with a debit?

Accepted Answer

Sales is a revenue account and is closed with a debit to transfer its balance to the income summary account at the end of the accounting period.

Question 3

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.Alberts pays the invoice on October 8 and takes the appropriate discount.The journal entry that Robertson makes on October 8 is:

Accepted Answer

Alberts pays within the discount period, so a 2% discount is applied to the $5,800, resulting in a $116 discount. The cash received is $5,684, and the accounts receivable is reduced by the full invoice amount of $5,800.

Question 4

Multiple-step income statements:

Accepted Answer

Multiple-step income statements contain more detail than a simple listing of revenues and expenses, such as separating operating expenses and non-operating expenses. They are not required by the FASB or only used in perpetual inventory systems, and cost of goods sold is listed separately from operating expenses.

Question 5

A company purchased merchandise inventory at a cost of $8,500 with credit terms 2/10,net 60.If the company borrows $8,330 to pay for the purchase on the last day of the discount period and pays the loan plus interest in the amount of $8,466.93 on the last day of the credit period,what is the net savings?

Accepted Answer

amounts borrowed: (8,500*.98) = 8,330*.12*50/365 = 136.93, Discount received: 170, Net Savings: 33.07

Question 6

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is:

Accepted Answer

Robertson must record the return of merchandise by debiting Sales Returns and Allowances for $500 and crediting Accounts Receivable for $500. Additionally, they must adjust inventory by debiting Merchandise Inventory for $350 and crediting Cost of Goods Sold for $350.

Question 7

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.The journal entry or entries that Robertson will make on October 1 is:

Accepted Answer

Under the periodic inventory system, only the sales and accounts receivable are recorded at the time of sale. The cost of goods sold and inventory adjustments are not recorded until the end of the period.

Question 8

Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management and financial management are called:

Accepted Answer

General and administrative expenses are expenses that support the overall operations of a business, including accounting, human resource management, and financial management. Cost of goods sold refers to the expenses directly related to the production of goods, selling expenses are related to the marketing and selling of products, purchasing expenses are related to the acquisition of goods and services for resale, and non-operating activities are unrelated to the core operations of the business.

Question 9

An account used in the periodic inventory system that is not used in the perpetual inventory system is

Accepted Answer

The periodic inventory system relies on physical counts of inventory to determine the cost of goods sold and the ending inventory, while the perpetual inventory system tracks inventory levels and cost of goods sold on a continuous basis. In the periodic system, purchases are recorded in a Purchases account, which is not used in the perpetual system as inventory and cost of goods sold are updated in real-time. Therefore, the correct answer is E, Purchases.

Question 10

A company purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry?

Accepted Answer

The company receives a 3% discount for paying within 15 days, reducing the payable amount to $4,171 ($4,300 - $129). The journal entry reflects the reduction in inventory cost and the cash payment.

Question 11

A company purchased merchandise inventory at a cost of $8,500 with credit terms 2/10,net 60.If the company borrows $8,330 to pay for the purchase on the last day of the discount period and pays the loan plus interest in the amount of $8,466.93 on the last day of the credit period,what is interest rate for borrowing money from the bank?

Accepted Answer

136.93/(8,330*50/365)=11.99982, 12%

Question 12

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

Accepted Answer

A single-step income statement shows only one subtotal for total expenses and includes cost of goods sold as another expense.

Question 13

Which of the following statements are true regarding the closing process of a merchandiser?

Accepted Answer

The answer of Which of the following statements are true...

Question 14

Alpha Company had cash sales of $94,275,credit sales of $83,450,sales returns and allowances of $1,700 and sales discounts of $3,475.Alpha's net sales for this period equal:

Accepted Answer

$94,275 + $83,450 - $1,700 - $3,475 = $172,550

Question 15

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is:

Accepted Answer

Under the periodic inventory system, only the sales return is recorded, not the cost of goods sold. Therefore, the entry should only include the sales returns and allowances and accounts receivable.

Question 16

When preparing an unadjusted trial balance using a periodic inventory system,the amount shown for Merchandise Inventory is:

Accepted Answer

When preparing an unadjusted trial balance using a periodic inventory system, the Merchandise Inventory account will show the beginning inventory amount because the cost of goods sold and the ending inventory are not yet determined until a physical count is taken at the end of the accounting period.

Question 17

On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry?

Accepted Answer

The answer of On July 22,a company purchased merchandise inventory...

Question 18

On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 1,what would be the appropriate journal entry?

Accepted Answer

The company is eligible for a 2% discount because it pays within 10 days. The discount is $105 (2% of $5,250), so the cash payment is $5,145. The journal entry reflects the reduction in inventory cost due to the discount.

Question 19

On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 60.If the company borrows money at 12% to pay for the purchase on the last day of the discount period and pays the loan off on the last day of the credit period,what would be the net savings for the company?

Accepted Answer

amounts borrowed: (5,250*.98) = 5,145*.12*50/365 = 84.57, Discount received: 105, Net Savings: 20.43

Question 20

A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income totaled $263,500,and cost of goods sold of $420,000.What is the net sales amount for the period?

Accepted Answer

1,500,000-102,000-123,000 = 1,275,000

Quiz 4: Reporting and Analyzing Merchandising Operations