Question 1

The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

Accepted Answer

The Income summary account is used to close revenue and expense accounts at the end of a period, and the resulting balance is transferred to the owner's Capital account, which represents the owner's equity in the business. Therefore, the balance of $25,000 in the Income summary account would be closed to the Capital account.

Question 2

If a physical count of inventory indicates that the Inventory account is overstated,an additional adjusting entry is required.

Accepted Answer

If a physical count of inventory indicates that the Inventory account is overstated, an adjusting entry is necessary to bring the balance of the account down to the actual value of the inventory on hand. This will ensure that the financial statements accurately reflect the true value of the company's assets.

Question 3

Which of the following defines Net sales revnue?

Accepted Answer

Net sales revenue is the total amount of revenue generated from sales after deducting sales returns and allowances as well as sales discounts. Option A accurately describes this formula.

Question 4

Which of the following defines Gross profit?

Accepted Answer

Gross profit is defined as the net sales revenue less cost of goods sold. It represents the profit earned by a business before deducting operating expenses. Therefore, option D is the correct answer. Option A is incorrect because it only subtracts sales discounts and allowances, not the cost of goods sold. Option B subtracts all operating expenses, not just the cost of goods sold. Option C only subtracts sales discounts, not the cost of goods sold.

Question 5

Net sales revenue is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

Accepted Answer

Net sales revenue is calculated by subtracting sales returns and allowances, and sales discounts from the total sales revenue. Therefore, the statement is true.

Question 6

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.
-Everett paid transportation costs of $100 to ship the goods to the customer.Please provide the journal entry to record transportation costs.
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Accepted Answer

The answer of On November 1,2012,Everett Janitorial Supply sold merchandise...

Question 7

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000.Which of the following entries is needed to record the shrinkage?

Accepted Answer

To adjust the ledger to match the physical count, the inventory account must be decreased by $1,000, and the cost of goods sold (or a similar expense account, such as shrinkage expense) must be increased by the same amount to reflect the loss of inventory. This is accurately represented in option C, where Inventory is credited (decreased) and Cost of Goods Sold is debited (increased) by $1,000.

Question 8

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.
-On April 22,Michelin received payment from the customer.How much cash was received from the customer?

Accepted Answer

A) Calculations: $9,000 - $1,000 = $8,000

Question 9

Gross profit is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

Accepted Answer

Gross profit is calculated as Sales revenue less Cost of Goods Sold (COGS), not Sales returns and allowances, and Sales discounts. Sales returns and allowances, and Sales discounts are deducted from Sales revenue to calculate Net Sales, not Gross Profit.

Question 10

The entry to close Sales discounts and Sales returns and allowances results in a debit to Income summary.

Accepted Answer

The answer of The entry to close Sales discounts and...

Question 11

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

Accepted Answer

Since the physical inventory count is more than the balance in the Inventory account, it means that there is more inventory on hand than what was recorded in the account. To adjust for this, the Inventory account should be debited to increase the balance to the actual amount ($67,900), and the difference should be credited to Cost of goods sold to reduce the amount recognized as a expense. Therefore, the adjusting entry would be a debit to Inventory and a credit to Cost of goods sold.

Question 12

A company uses the perpetual inventory system.The inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $43,000.Which of the following would be included in the required adjusting entry?

Accepted Answer

The actual inventory is less than what is recorded in the accounting system, so a credit entry is needed to reduce the inventory account balance to the actual level of $43,000. Therefore, a $7,000 credit to Inventory is required to adjust the account. Additionally, since the inventory balance is decreasing, a corresponding increase in the Cost of goods sold (COGS) account is also required. The entry for COGS will be a $7,000 debit, which means that option C is incorrect. Option B is also incorrect because it suggests debiting COGS by the entire amount of $50,000, which would be incorrect since only a $7,000 adjustment is required.

Question 13

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.
-Everett paid transportation costs of $100.On November 6,2012,merchandise of $1,000 from the November 1 sale was returned.The returned merchandise had cost $600.Please provide the two journal entries to record the return.
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Accepted Answer

The answer of On November 1,2012,Everett Janitorial Supply sold merchandise...

Question 14

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.
-Please provide the journal entry to record Sales revenue.
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Accepted Answer

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Question 15

The general ledger shows a balance of $23,678 in the Inventory account at the end of the period.A physical inventory shows a count of $22,078.The adjusting entry would be a:

Accepted Answer

The correct adjusting entry to reconcile the physical inventory count with the general ledger is a debit to Cost of Goods Sold and a credit to Inventory. This entry decreases the Inventory account to match the physical count and increases the Cost of Goods Sold to reflect the cost of inventory that has been used or lost.

Question 16

Which of the following accounts is used ONLY at the close of the merchandising cycle?

Accepted Answer

Income summary is used ONLY at the close of the merchandising cycle to summarize the revenue and expenses and determine the net income for the period. Net sales revenue, cost of goods sold, and sales revenue are used throughout the merchandising cycle to track the sales and expenses.

Question 17

The entry to close Cost of goods sold results in a debit to Income summary.

Accepted Answer

Cost of goods sold is an expense account and closing it requires a debit to Income summary account.

Question 18

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.
-Everett paid transportation costs of $100.On November 6,2012,merchandise of $1,000 from the November 1 sale was returned.The returned merchandise had cost $600.Everett received payment for the balance of the sale on November 10,2012.Please provide the journal entry to record the receipt of payment from the customer.
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Accepted Answer

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Question 19

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.
-Please provide the journal entry to record Cost of goods sold.
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Accepted Answer

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Question 20

When a company uses the perpetual inventory method,it should NOT be necessary to conduct a physical count of inventory.

Accepted Answer

While perpetual inventory systems aim to provide real-time, accurate inventory tracking, physical counts may still be necessary to reconcile any discrepancies that may arise between the system's records and the actual inventory on hand.

Quiz 5: Merchandising Operations

The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

If a physical count of inventory indicates that the Inventory account is overstated,an additional adjusting entry is required.

Which of the following defines Net sales revnue?

Which of the following defines Gross profit?

Net sales revenue is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000.Which of the following entries is needed to record the shrinkage?

Gross profit is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

The entry to close Sales discounts and Sales returns and allowances results in a debit to Income summary.

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

A company uses the perpetual inventory system.The inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $43,000.Which of the following would be included in the required adjusting entry?

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200. -Please provide the journal entry to record Sales revenue. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

The general ledger shows a balance of $23,678 in the Inventory account at the end of the period.A physical inventory shows a count of $22,078.The adjusting entry would be a:

Which of the following accounts is used ONLY at the close of the merchandising cycle?

The entry to close Cost of goods sold results in a debit to Income summary.

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200. -Please provide the journal entry to record Cost of goods sold. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

When a company uses the perpetual inventory method,it should NOT be necessary to conduct a physical count of inventory.

Quiz 5: Merchandising Operations

The Income summary account has a $25,000 credit balance after the revenue and expense accounts have been closed.To which account is this balance closed?

If a physical count of inventory indicates that the Inventory account is overstated,an additional adjusting entry is required.

Which of the following defines Net sales revnue?

Which of the following defines Gross profit?

Net sales revenue is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

A company's ledger shows an Inventory balance of $20,000 and a physical count of the inventory shows $19,000.Which of the following entries is needed to record the shrinkage?

Gross profit is equal to Sales revenue less Sales returns and allowances,and Sales discounts.

The entry to close Sales discounts and Sales returns and allowances results in a debit to Income summary.

The general ledger shows a balance of $65,300 in the Inventory account at the end of the period.A physical inventory shows a count of $67,900.The adjusting entry would be a:

A company uses the perpetual inventory system.The inventory account balance is $50,000.An actual count of inventory reveals that actual inventory is $43,000.Which of the following would be included in the required adjusting entry?

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200. -Please provide the journal entry to record Sales revenue. \begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}​​

The general ledger shows a balance of $23,678 in the Inventory account at the end of the period.A physical inventory shows a count of $22,078.The adjusting entry would be a:

Which of the following accounts is used ONLY at the close of the merchandising cycle?

The entry to close Cost of goods sold results in a debit to Income summary.

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200. -Please provide the journal entry to record Cost of goods sold. \begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}​​

When a company uses the perpetual inventory method,it should NOT be necessary to conduct a physical count of inventory.

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200. -Please provide the journal entry to record Sales revenue. $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

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