FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Accounting for Merchandising Businesses

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Multiple-step income statements show

A) gross profit but not income from operations
B) neither gross profit nor income from operations
C) both gross profit and income from operations
D) income from operations but not gross profit

E) C) and D)
F) A) and D)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Calculate the gross profit for Jefferson Company based on the following:

A) $495,500
B) $183,500
C) $721,500
D) $226,000

E) None of the above
F) C) and D)

Correct Answer

verified

Show Answer

Question 63

Essay

Review LaterAdd Note

Using the following data taken from Payton Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended May 31. ​

Travis Company purchased merchandise on account from a supplier for $5,700,terms 2 / 10,net 30.Travis Company paid for the merchandise within the discount period. ​Under a perpetual inventory system,record the journal entries required for the above transactions.

Which of the following is not a difference between a retail business and a service business?

Sellers and buyers are required to record trade discounts.

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,prepare the cost of goods sold section of the income statement for the year ended March 31. ​

When merchandise purchased on account is returned under the perpetual inventory system,the buyer would debit

If the perpetual inventory system is used,an account entitled Cost of Goods Sold is included in the general ledger.

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be

Conquest Company uses a perpetual inventory system.Conquest purchased $1,500 of merchandise on account and payment was made within the discount period.The credit terms were 2 / 10,n / 30.Journalize Conquest's purchase and payment.

Purchased goods in transit,shipped FOB destination,should be excluded from ending inventory of the buyer.

Closing entries for a merchandising business are not similar to those for a service business.

Under the perpetual inventory system,all purchases of merchandise are debited to the account

In a perpetual inventory system,the Inventory account is only used to reflect the beginning inventory.

Cost of goods sold is the amount that the merchandising company pays for the merchandise it intends to sell.

During the current year,merchandise is sold for $137,500 cash and $425,600 on account.The cost of the goods sold is $322,325.What is the amount of the gross profit?

If the buyer bears the freight costs related to a purchase,the terms are said to be FOB destination.

Under the periodic inventory system,the journal entry to record the purchase of inventory will include a debit to

When the terms of sale are FOB shipping point,the buyer pays the freight charges.