Question 1

A sales return is recorded with a credit to Accounts receivable.

Accepted Answer

A sales return means that the customer is returning a previously purchased item, which means they no longer owe the company money. Therefore, the company must reduce its Accounts receivable balance by crediting it.

Question 2

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300.
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\end{array}$$

Accepted Answer

The answer of Journalize the following transactions (using the perpetual...

Question 3

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

Accepted Answer

Under the perpetual inventory method, each sale of merchandise is recorded in the inventory account as well as the cost of goods sold account. When a sale is made on account, the revenue account is also credited, but this does not affect the recording of cost of goods sold. Therefore, separate entries are required to record revenue and cost of goods sold.

Question 4

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:
A) debited to Inventory.
B) credited to Inventory.
C) debited to Cost of goods sold.
D) credited to Cost of goods sold.

Accepted Answer

In a perpetual inventory system, purchase discounts are credited to the Inventory account to reduce the cost of inventory.

Question 5

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.
-
Please provide the journal entry on Aug.9.
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Accepted Answer

The answer of Reid Art Supply Company uses a perpetual...

Question 6

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.
-
Please provide the journal entry on Aug.15.
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Accepted Answer

The answer of Reid Art Supply Company uses a perpetual...

Question 7

Journalize the following transactions (using the perpetual inventory method).Paid $230 cash for freight in on merchandise purchased.
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Accepted Answer

The answer of Journalize the following transactions (using the perpetual...

Question 8

Oscar's Packaging shipped goods to a customer and paid the freight out of $400 in cash.Please provide the journal entry for the payment of freight out.
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Accepted Answer

The answer of Oscar's Packaging shipped goods to a customer...

Question 9

A company purchased inventory for $2,200 on account,and recorded the following journal entry:
 $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 2,200 & \
\hline \text { Accounts payable } & & 2,200 \
\hline
\end{array}$$ The vendor's invoice showed terms of 3/10,net 30.Please provide the journal entry for the payment of the invoice on the 7th day (using the perpetual inventory method).
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Accepted Answer

The answer of A company purchased inventory for $2,200 on...

Question 10

Compute the amount of payment for an invoice of $5,600,4/10,n/30 paid on the 7th day.
A) $5,600
B) $5,040
C) $5,376
D) $5,570

Accepted Answer

C) Calculations: $5,600 × .96 = $5,376

Question 11

A company purchased inventory for $2,200 on account,and recorded the following journal entry:
 $$\begin{array} { | l | r | r | } 
\hline \text { Inventory } & 2,200 & \
\hline \text { Accounts payable } & & 2,200 \
\hline
\end{array}$$ The vendor's invoice showed terms of 3/10,n/30.Please provide the journal entry for the payment of the invoice on the 17th day (using the perpetual inventory method).
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Accepted Answer

The answer of A company purchased inventory for $2,200 on...

Question 12

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.
-
Please provide the journal entry on Aug.5.
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\end{array}$$

Accepted Answer

The answer of Reid Art Supply Company uses a perpetual...

Question 13

A sales allowance is recorded with a debit to Inventory.

Accepted Answer

A sales allowance is recorded with a debit to Sales Allowances (or Sales Allowance and Returns) account, not Inventory. This reflects a reduction in the sales revenue, not a change in inventory.

Question 14

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.
-The company then returned $200 of damaged goods and got an allowance from the vendor.The company paid the vendor 8 days after the sale.Assuming this was the only transaction affecting inventory,and that there was no beginning balance,what would the cost basis of the inventory be?
A) $1,764
B) $1,864
C) $2,100
D) $1,900

Accepted Answer

B) Calculations: $2,000 + $100 - $200 - $36 = $1,864

Question 15

When a company ships goods to a customer and pays for freight out,how is that cost recorded?
A) As an operating expense
B) As an addition to the cost of inventory
C) As a reduction of sales revenue
D) As an addition to cost of goods sold

Accepted Answer

Freight out, or the cost of shipping goods to customers, is considered an operating expense. It is recorded as a separate expense related to selling and distribution, rather than being included in the cost of inventory or cost of goods sold.

Question 16

A sales allowance is recorded with a credit to Accounts receivable.

Accepted Answer

A sales allowance reduces the amount that the customer owes, so it is recorded as a credit to Accounts receivable.

Question 17

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.
-
Please provide the journal entry on Aug.10.
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Accepted Answer

The answer of Reid Art Supply Company uses a perpetual...

Question 18

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.
-The company paid the vendor 9 days after the sale.Assuming this was the only transaction affecting inventory,and that there was no beginning balance,what would the cost basis of the inventory be?
A) $1,960
B) $2,000
C) $2,060
D) $2,100

Accepted Answer

C) Calculations: $2,000 + $100 - $40 = $2,060

Question 19

A company has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the merchandise.Which of the following will most likely be noted as the delivery terms?
A) FOB destination
B) FOB shipping point
C) FOB 2/10, n/30
D) None of the above

Accepted Answer

FOB shipping point means that the buyer is responsible for the transportation costs and risks from the shipping point. This matches the scenario where the buyer pays for the delivery of the merchandise.

Question 20

A sales return is recorded with a credit to Inventory.

Accepted Answer

A sales return is recorded with a debit to Sales Returns and Allowances (or a similar account) and a credit to Accounts Receivable or Cash, depending on the original sale. Inventory is adjusted separately, typically with a debit to Inventory and a credit to Cost of Goods Sold if the returned goods are restocked.

Quiz 5: Merchandising Operations

A sales return is recorded with a credit to Accounts receivable.

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

Journalize the following transactions (using the perpetual inventory method).Paid $230 cash for freight in on merchandise purchased. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

Oscar's Packaging shipped goods to a customer and paid the freight out of $400 in cash.Please provide the journal entry for the payment of freight out. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

Compute the amount of payment for an invoice of $5,600,4/10,n/30 paid on the 7th day.

A sales allowance is recorded with a debit to Inventory.

When a company ships goods to a customer and pays for freight out,how is that cost recorded?

A sales allowance is recorded with a credit to Accounts receivable.

A company has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the merchandise.Which of the following will most likely be noted as the delivery terms?

A sales return is recorded with a credit to Inventory.

Quiz 5: Merchandising Operations

A sales return is recorded with a credit to Accounts receivable.

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300. \begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}​​

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

Journalize the following transactions (using the perpetual inventory method).Paid $230 cash for freight in on merchandise purchased. \begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}​​

Oscar's Packaging shipped goods to a customer and paid the freight out of $400 in cash.Please provide the journal entry for the payment of freight out. \begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}​​

Compute the amount of payment for an invoice of $5,600,4/10,n/30 paid on the 7th day.

A sales allowance is recorded with a debit to Inventory.

When a company ships goods to a customer and pays for freight out,how is that cost recorded?

A sales allowance is recorded with a credit to Accounts receivable.

A company has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the merchandise.Which of the following will most likely be noted as the delivery terms?

A sales return is recorded with a credit to Inventory.

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

Journalize the following transactions (using the perpetual inventory method).Paid $230 cash for freight in on merchandise purchased. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

Oscar's Packaging shipped goods to a customer and paid the freight out of $400 in cash.Please provide the journal entry for the payment of freight out. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$