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:
A)$80,967
B)$83,692
C)$88,067
D)$76,592
E)$99,542

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?
A)Sales Discounts
B)Sales Returns and Allowances
C)Cost of Goods Sold
D)Operating Expenses
E)Sales

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:
A)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 4,000 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$
C)
$$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 3,920 & \
\hline \text { Sales discounts } & 80 & \
\hline \text { Accounts receivable } & & 4,000 \
\hline
\end{array}$$
D)
$$\begin{array} { |l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Accounts receivable } & & 5,684 \
\hline
\end{array}$$
E)
$$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 5,684 & \
\hline \text { Sales discounts } & 116 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$$

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:
A)Are required by the FASB
B)Contain more detail than a simple listing of revenues and expenses
C)Are required for the perpetual inventory system
D)List cost of goods sold as an operating expense
E)Can only be used in perpetual inventory systems

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?
A)$170.00
B)$-33.07
C)$136.93
D)$33.07
E)There is no savings to the company

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:
A) 
$$\begin{array} { | c | r | r | } 
\hline \text { Sales returns and allowances } & 500 & \
\hline \text { Accounts receivable } & & 500 \
\hline \text { Merchandise inventory } & 350 & \
\hline \text { Cost of goods sold } & & 350 \
\hline
\end{array}$$
B)
$\begin{array}{|c|r|r|}
\hline \text { Sales returns and allowances } & 500 & \
\hline \text { Accounts receivable } & & 500 \
\hline
\end{array}$

C)
$$\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 500 & \
\hline \text { Sales returns and allowances } & & 500 \
\hline
\end{array}$$
D)
$\begin{array}{|lr|r|}
\hline \text { Accounts receivable } & 500 & \
\hline \text { Sales returns and allowances } & & 500 \
\hline \text { Cost of goods sold } & 350 & \
\hline \text { Merchandise inventory } & & 350 \
\hline
\end{array}$

E)
$\begin{array}{|c|r|r|}
\hline \text { Sales returns and allowances } & 350 & \
\hline \text { Accounts receivable } & & 350 \
\hline
\end{array}$

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:
A)
$\begin{array}{|l|r|r|}
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline
\end{array}$
B)
$$\begin{array} { | l | r | r | } 
\hline \text { Sales } & 5,800 & \
\hline \text { Accounts receivable } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise Inventory } & & 4,000 \
\hline
\end{array}$$
C)
$$\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline
\end{array}$$
D)
$$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 5,800 & \
\hline \text { Sales } & & 5,800 \
\hline \text { Cost of goods sold } & 4,000 & \
\hline \text { Merchandise inventory } & & 4,000 \
\hline
\end{array}$$
E)
$$\begin{array} { | c | r | r | } 
\hline \text { Accounts receivable } & 4,000 & \
\hline \text { Sales } & & 4,000 \
\hline
\end{array}$$

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:
A)Cost of goods sold
B)Selling expenses
C)Purchasing expenses
D)General and administrative expenses
E)Non-operating activities

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
A)Merchandise Inventory
B)Sales
C)Sales Returns and Allowances
D)Accounts Payable
E)Purchases

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?
A) 
$$\begin{array} { | c | c | c | } 
\hline \text { Merchandise Inventory } & 4,300 & \
\hline \text { Accounts Payable } & & 4,300 \
\hline
\end{array}$$
B)
$$\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 4,300 & \
\hline \text { Merchandise Inventory } & & 4,300 \
\hline
\end{array}$$
C)
$$\begin{array} { | c | c | c | } 
\hline \text { Purchase Discount } & 4,171 & \
\hline \text { Accounts Payable } & & 4,171 \
\hline
\end{array}$$
D)
$$\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 4,171 & \
\hline \text { Cash } & & 4,171 \
\hline
\end{array}$$
E)
$$\begin{array} { | l | r | r | } 
\hline \text { Accounts Payable } & 4,300 & \
\hline \text { Merchandise Inventory } & & 129 \
\hline \text { Cash } & & 4,171 \
\hline
\end{array}$$

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?
A)12%
B)13.5%
C)11.5%
D)16%
E)Can't be determined from the information given

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:
A)Balanced income statement
B)Single-step income statement
C)Multiple-step income statement
D)Combined income statement
E)Simplified income statement

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?
A)Sales Discounts,Sales Returns and Allowances and Cost of Goods sold should all be credited during closing
B)Sales Discounts,Sales Returns and Allowances and Cost of Goods sold should all be debited during closing
C)Sales Discounts and Sales Returns and Allowances should be debited; Cost of Goods Sold should be credited during closing
D)Sales Discounts and Sales Returns and Allowances should be credited; Cost of Goods Sold should be debited during closing
E)Sales Discounts and Sales Returns and Allowances are not closed.Cost of Goods Sold should be credited

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:
A)$94,275
B)$172,550
C)$174,250
D)$176,025
E)$177,725

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:
A)
$$\begin{array} { | l | r | r | } 
\hline \text { Sales returns and allowances } & 500 & \
\hline \text { Accounts receivable } & & 500 \
\hline \text { Merchandise inventory } & 350 & \
\hline \text { Cost of goods sold } & & 350 \
\hline
\end{array}$$
B)
$\begin{array}{|c|r|r|}
\hline \text { Sales returns and allowances } & 500 & \
\hline \text { Accounts receivable } & & 500 \
\hline
\end{array}$

C)
$\begin{array}{|l|r|r|}
\hline \text { Accounts receivable } & 500 & \
\hline \text { Sales returns and allowances } & & 500 \
\hline
\end{array}$

D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts receivable } & 500 & \
\hline \text { Sales returns and allowances } & & 500 \
\hline \text { Cost of goods sold } & 350 & \
\hline \text { Merchandise inventory } & & 350 \
\hline
\end{array}$

E)
$\begin{array}{|c|r|r|}
\hline \text { Sales returns and allowances } & 350 & \
\hline \text { Accounts receivable } & & 350 \
\hline
\end{array}$

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:
A)The ending inventory amount
B)The beginning inventory amount
C)Equal to the cost of goods sold
D)Equal to the cost of goods purchased
E)Equal to the gross profit

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?
A)
$$\begin{array} { | c | c | c | } 
\hline \text { Merchandise Inventory } & 5,250 & \
\hline \text { Accounts Payable } & & 5,250 \
\hline
\end{array}$$
B)
$\begin{array}{|c|c|c|}
\hline \text { Accounts Payable } & 5,250 & \
\hline \text { Merchandise Inventory } & & 5,250 \
\hline
\end{array}$

C)
$\begin{array}{|l|l|l|}
\hline \text { Accounts Payable } & 5,250 & \
\hline \text { Cash } & & 5,250 \
\hline
\end{array}$

D)
$$\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 5,145 & \
\hline \text { Cash } & & 5,145 \
\hline
\end{array}$$
E)
$$\begin{array} { | l | r | r | } 
\hline \text { Accounts Payable } & 5,250 & \
\hline \text { Merchandise Inventory } & & 105 \
\hline \text { Cash } & & 5,145 \
\hline
\end{array}$$

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?
A)
$$\begin{array} { | c | c | c | } 
\hline \text { Merchandise Inventory } & 5,250 & \
\hline \text { Accounts Payable } & & 5,250 \
\hline
\end{array}$$
B)
$\begin{array}{|c|c|c|}
\hline \text { Accounts Payable } & 5,250 & \
\hline \text { Merchandise Inventory } & & 5,250 \
\hline
\end{array}$

C)
$\begin{array}{|c|c|c|}
\hline \text { Purchase Discount } & 5,145 & \
\hline \text { Accounts Payable } & & 5,145 \
\hline
\end{array}$

D)
$$\begin{array} { | c | c | c | } 
\hline \text { Accounts Payable } & 5,145 & \
\hline \text { Cash } & & 5,145 \
\hline
\end{array}$$
E)
$$\begin{array} { | l | r | r | } 
\hline\text { Accourts Payable } & 5,250 & \
\hline \text { Merchandise Inventory } & & 105 \
\hline \text { Cash } & & 5,145 \
\hline
\end{array}$$

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?
A)$99.50
B)$-20.43
C)$84.57
D)$20.43
E)$-84.57

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?
A)$1,500,000
B)$1,275,000
C)$1,725,000
D)$1,521,000
E)$1,479,000

Accepted Answer

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

Quiz 4: Reporting and Analyzing Merchandising Operations

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:

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

Multiple-step income statements:

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:

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

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

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?

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

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

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:

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

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?

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?

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?