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Exam 5: Accounting for Merchandising Businesses

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Question 81

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The seller records the sales tax as part of the sales amount.

A) True
B) False

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Question 82

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Under a periodic inventory system,the accounts Purchases,Purchases Returns and Allowances,Purchases Discounts,and Freight In are found on the balance sheet.

A) True
B) False

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Question 83

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In a perpetual inventory system,when merchandise is returned to the supplier,Cost of Goods Sold is debited as part of the transaction.

Dollar Co.sold merchandise to Pound Co.on account,$25,500,terms 2 / 15,net 45.Pound Co.paid the invoice within the discount period.What is the sales amount to be recorded in the above transactions?

If merchandise sells for $3,500,with terms of 3 / 15,n / 45,and the cost of the inventory sold is $2,100,the amount charged to sales is

Under a periodic inventory system,closing entries will include

Net income plus operating expenses is equal to

When purchases of merchandise are made on account with a perpetual inventory system,the transaction is recorded with which entry?

Which of the following items should not be included in the cost of ending inventory?

If the buyer is to pay the freight costs of delivering merchandise,delivery terms are stated as

Merchandise with a sales price of $5,000 is sold on account with terms 2 / 10,n / 30.The journal entry to record the sale would include a

The abbreviation FOB stands for "free on board."

Madison Company's perpetual inventory records indicate that $875,300 of merchandise should be on hand on October 31.The physical inventory indicates that $781,900 is actually on hand.Journalize the adjusting entry for the inventory shrinkage for Madison Company for the year ended October 31.

Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies.Bargain Wholesalers uses a perpetual inventory system.Journalize the following transactions: ​ ​ Journal

Because many companies use computerized accounting systems,periodic inventory is widely used.

If title to merchandise purchases passes to the buyer when the goods are shipped from the seller,the terms are

Merchandise is ordered on November 10; the merchandise is shipped by the seller and the invoice is prepared,dated,and mailed by the seller on November 13; the merchandise is received by the buyer on November 18; the entry is made in the buyer's accounts on November 20.The credit period begins with what date?

Using a perpetual inventory system,the entry to record the return from a customer of merchandise sold on account includes a

Jacob Co.sells merchandise on credit to Isaiah Co.for $9,700.The invoice is dated May 1 with terms of 1 / 15,net 45.What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Freight-in is the amount paid by the company to deliver merchandise sold to a customer.