Question 1

Under the perpetual inventory system,the entry to record a purchase return would include a credit to which account?

Accepted Answer

Under the perpetual inventory system, when a purchase return occurs, the Merchandise Inventory account is credited to reduce the inventory for the returned goods.

Question 2

Under the perpetual inventory system,which of the following accounts would not be used?

Accepted Answer

Under the perpetual inventory system, the "Purchases" account is not used. Instead, inventory purchases are directly recorded in the "Merchandise Inventory" account, which is continuously updated to reflect purchases and sales.

Question 3

Use this information to answer the following question.  In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000.
Net cost of purchases for the period were

Accepted Answer

To calculate the net cost of purchases, we need to subtract the ending merchandise inventory from the sum of beginning merchandise inventory and purchases.

Beginning merchandise inventory = $11,000 
Ending merchandise inventory = $7,000

Net purchases = Beginning merchandise inventory + Purchases - Ending merchandise inventory

We don't have the exact amount of purchases, but we can calculate it by rearranging the formula as:

Purchases = Net purchases - Beginning merchandise inventory + Ending merchandise inventory

We are given the cost of goods sold as $39,000, which is equal to the sum of net purchases and beginning inventory minus ending inventory.

Cost of goods sold = Net purchases + Beginning merchandise inventory - Ending merchandise inventory

$39,000 = Net purchases + $11,000 - $7,000 
$39,000 = Net purchases + $4,000 
Net purchases = $35,000

Now we can use the formula above to find the cost of purchases:

Cost of purchases = Net purchases - Beginning merchandise inventory + Ending merchandise inventory

Cost of purchases = $35,000 - $11,000 + $7,000 = $31,000

Therefore, the best choice is C) $27,000, which is not one of the options provided.

Question 4

Use this information to answer the following question.  In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000.
If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

Accepted Answer

The answer of Use this information to answer the following...

Question 5

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on the next day.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Accepted Answer

The journal entry to record the merchandise returns would be to credit (decrease) Accounts Payable by $200 and debit (decrease) Inventory by $200. Option B correctly reflects this entry.

Question 6

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

Accepted Answer

Under the perpetual inventory system, a company continuously tracks the quantity and value of inventory on hand. Therefore, when a sale is made, not only is the revenue recorded but also the corresponding decrease in inventory and increase in the cost of goods sold for the cost of the merchandise sold. This maintains an accurate and up-to-date inventory balance. Option A and C are partially correct, as they recognize the need to record changes in inventory, but do not account for the corresponding decrease in cost of goods sold. Option D is incorrect, as the perpetual inventory system requires continuous updating of inventory records.

Question 7

Use this information to answer the following question.  In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
Net sales for the period were

Accepted Answer

We can use the formula:
Net Sales = Gross Sales - Sales Returns and Allowances
Gross Sales = Cost of Goods Sold + Ending Merchandise Inventory – Beginning Merchandise Inventory
From the given information,
Beginning Merchandise Inventory = $22,000
Ending Merchandise Inventory = $14,000
Cost of Goods Sold = Gross Profit - Operating Expenses
Gross Profit = Net Sales - Cost of Goods Sold
Assuming Operating Expenses = 0
We can calculate the Gross Profit as follows:
Gross Profit = $63,000
Therefore,
Gross Sales = $63,000 + $14,000 - $22,000 = $55,000
Net Sales = Gross Sales - Sales Returns and Allowances
Assuming Sales Returns and Allowances = $0
Net Sales = $55,000
Hence, the best choice is C) $295,000.

Question 8

Assume a company uses the periodic inventory system and has a beginning merchandise inventory balance of $10,000,purchases of $150,000,and sales of $250,000.The company closes its records once a year on December 31.In the accounting records,the merchandise inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was

Accepted Answer

The answer of Assume a company uses the periodic inventory...

Question 9

Brendan Company sold merchandise worth $1,600 on credit,terms n/15 and on the next day the customer returned merchandise worth $100,which cost $60 for Brendan Company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Accepted Answer

The answer of Brendan Company sold merchandise worth $1,600 on...

Question 10

Use this information to answer the following question.  In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
Net income for the period was

Accepted Answer

The answer of Use this information to answer the following...

Question 11

The amount of cost of goods available for sale during the year depends on the amounts of

Accepted Answer

The cost of goods available for sale during the year is determined by the sum of the beginning merchandise inventory and the net cost of purchases. This calculation does not directly involve the ending merchandise inventory or the cost of goods sold, as those figures are used to determine the cost of goods sold and ending inventory at the end of the period.

Question 12

Brendan Company sold merchandise worth $1,600 on credit,terms n/15.The merchandise sold had cost $1,100.What is the required journal entry to record the transaction under the perpetual inventory system?

Accepted Answer

The answer of Brendan Company sold merchandise worth $1,600 on...

Question 13

Use this information to answer the following question. The selected accounts and balances for Keystone Market appear as follows:
 Cost of goods available for sale would appear on the income statement as

Accepted Answer

Cost of goods available for sale is calculated by adding the beginning inventory and purchases during the period. In this case, it would be $57,000 (beginning inventory) + $74,000 (purchases) = $131,000. Therefore, cost of goods available for sale would appear on the income statement as $131,000.

Question 14

Assuming that net cost of purchases was $39,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

Accepted Answer

The answer of Assuming that net cost of purchases was...

Question 15

Which of the following is necessary for computing cost of goods sold but not necessary for computing the cost of goods available for sale?

Accepted Answer

To calculate the cost of goods available for sale, you need the beginning inventory, purchases, and freight-in. However, to calculate the cost of goods sold, you do not need the ending inventory, which is why C is the correct answer.

Question 16

Which of the following is not considered in computing net cost of purchases?

Accepted Answer

Freight-out expenses are not considered in computing net cost of purchases because they are a separate type of expense and do not directly affect the cost of goods purchased. Net cost of purchases is calculated by subtracting the returns and allowances from the total cost of purchases, and adding any freight paid on the goods.

Question 17

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30.What is the required journal entry to record the transaction under the perpetual inventory system?

Accepted Answer

The answer of Liberty Industries purchased merchandise worth $1,800 on...

Question 18

Use this information to answer the following question.  In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000.
Cost of goods sold for the period was

Accepted Answer

The answer of Use this information to answer the following...

Question 19

Under the perpetual inventory system,in addition to making the entry to record a sales return by a customer,a company would

Accepted Answer

When a customer returns merchandise under the perpetual inventory system, the company must adjust its inventory to reflect the returned items. This involves increasing the Merchandise Inventory account (to add the returned items back into inventory) and decreasing the Cost of Goods Sold account (to reverse the cost of the sale that didn't ultimately occur).

Question 20

The entry to record a sales return from a customer would require a(n)

Accepted Answer

When a customer returns a product, it is recorded as a sales return or sales allowance, which reduces the amount of sales revenue earned. Therefore, the entry to record a sales return would require an increase to the Sales Returns and Allowances account.

Quiz 5: Accounting for Merchandising Operations

Under the perpetual inventory system,the entry to record a purchase return would include a credit to which account?

Under the perpetual inventory system,which of the following accounts would not be used?

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000. Net cost of purchases for the period were

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000. If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30 and returned merchandise worth $200 on the next day.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Under the perpetual inventory system,in addition to making the entry to record a sale,a company would

Use this information to answer the following question. In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Net sales for the period were

Brendan Company sold merchandise worth $1,600 on credit,terms n/15 and on the next day the customer returned merchandise worth $100,which cost $60 for Brendan Company.What is the required journal entry to record the merchandise returns under the perpetual inventory system?

Use this information to answer the following question. In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000. Net income for the period was

The amount of cost of goods available for sale during the year depends on the amounts of

Brendan Company sold merchandise worth $1,600 on credit,terms n/15.The merchandise sold had cost $1,100.What is the required journal entry to record the transaction under the perpetual inventory system?

Use this information to answer the following question. The selected accounts and balances for Keystone Market appear as follows: Cost of goods available for sale would appear on the income statement as

Assuming that net cost of purchases was $39,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

Which of the following is necessary for computing cost of goods sold but not necessary for computing the cost of goods available for sale?

Which of the following is not considered in computing net cost of purchases?

Liberty Industries purchased merchandise worth $1,800 on credit,terms n/30.What is the required journal entry to record the transaction under the perpetual inventory system?

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000. Cost of goods sold for the period was

Under the perpetual inventory system,in addition to making the entry to record a sales return by a customer,a company would

The entry to record a sales return from a customer would require a(n)