Question 1

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.

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Question 2

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

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Question 3

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

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Question 4

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.

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

Question 5

Martin Corporation allows customers to return merchandise within 60 days of purchase.At year-end,Martin estimates that sales of $20,000,with a cost of $14,000 will be returned in the upcoming year.The unadjusted balance in Inventory Returns Estimated is a debit of $4,000,and the unadjusted balance in Sales Refund Payable is a credit of $2,500.Prepare the adjusting entries necessary to record the revenue side and cost side estimates for returns and allowances.

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Question 6

Barbara's Boats uses the periodic inventory system and the net method of accounting for purchases.The company had the following transactions during January:
 January 6: $\quad$ Purchased $\$ 10,000$ of inventory. The seller's credit terms are $2 / 10 , n / 30$
January 31: Due to an oversight, the invoice was not paid within the discount period. Full payment was made on January 31. 
Prepare journal entries to record each of the preceding transactions.

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Question 7

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

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Question 8

Reductions in the selling price of merchandise sold to customers,often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price is referred to as ________.

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Question 9

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

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Question 10

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

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Question 11

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

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Question 12

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

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Question 13

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

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Question 14

A seller usually prepares a ________ to confirm a buyer's return or allowance,and informs the buyer of the seller's credit to the buyer's Account Receivable on the seller's books.

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The answer of A seller usually prepares a ________ to...

Question 15

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

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Question 16

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

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Question 17

Inventory shrinkage can be computed by comparing the ________ of inventory with recorded quantities and amounts.

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Question 18

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

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Question 19

________ can benefit a seller by decreasing the delay in receiving cash and reducing future collection efforts.

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Question 20

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...

Quiz 4: Accounting for Merchandising Operations