Test 4 - Chapter 5

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A merchandiser differs from a service business in that it

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Two categories of expenses in merchandising companies are

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The primary source of revenue for a service company is

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Service revenue less operating expenses is called

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The operating cycle of a service company differs from that of a merchandising company in that

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Which of the following formulas in incorrect

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With respect to the income statement

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The journal entry to record the return of merchandise purchased on account under a perpetual inventory system would credit

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Under a perpetual inventory system, acquisition of merchandise for resale is debited to the

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Under a perpetual inventory system, cost of goods sold is recorded

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If ABC's accounting records should, using a perpetual inventory system, an ending inventory balance of $25 000 and a physical count shows $23 000, it is important to

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Detailed records of goods held for resale are not maintained undera a

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Babcock Co. purchased merchandise from Gerber Co. with freight terms of FOB shipping point. The freight costs will be paid by the

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Wright Co. recently made a purchase of $10 000 from a major supplier. Shipping costs were $200, terms FOB shipping point. To record this purchase, Wright Co. will need to debit the

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Benders Shoe Store had a beginning merchandise inventory of $18 000. During the period, purchases were $70 000; purchase returns, $3 000; and freight in, $6 000. A physical count of inventory at the end of the period revealed that $12 000 was still on hand. Using a perpetual inventory system, CoGS was

1

The Sales R&A account is classified as

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A sales invoice is a a source document that

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The journal entry to record a shortage of inventory at the end of the accounting period is

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Sales revenue

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A Sales R&A account is not debited if

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If a customer agrees to keep merchandise that is defective because the seller is willing to reduce the price, this transaction is known as a sales

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When goods are returned that relate to a prior cash sale

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The Sales R&A account does not provide info to management about

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Which of the following accounts has a normal credit balance?

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Tokyo Co sells merchandise on account for $1 200 (cost $750) to Thomas Co. Thomas Co returns $00 (cost $250) of merchandise that was damaged, along with a cheeque to settle the account. What entry does Tokyo Co make upon receipt of the cheque?

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Which of the following is a true statement about inventory systems

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A physical inventory should be taken

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Northend Electric returned to Southerby Inc 5 damaged fuses. Southerby accepted the return and refunded the $200 Northend had paid for the order. To record this return, Southerby accountant must

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In a perpetual inventory system, the Merchandise Inventory account must equal the actual merchandise on hand

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Taking a physical inventory count involves all of the following except

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If a purchaser using a perpetual system agrees to freight terms of FOB destination, then the

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Freight costs paid by a seller on merchandise sold to customers will cause an increase

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Using a perpetual inventory system, the respective normal account balances balances of Merchandise Inventory, Sales R&A, Cost of Goods Sold are

1

Income from operations will result if

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If a company has net sales of 500 000 and cost of goods sold of 350 000, the gross profit percentage is

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Gross profit does not appear

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Kerr Co has a beginning merchandise inventory at 17 000 an ending merchandise inventory of 20 000 and a cost of goods sold of 20 000. Inventory turnover is calculated to be

1

Inventory Turnover measures the number of times inventory is

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In preparing closing entries for a merchandising companies, the owner's capital account will be debited for the balance of the

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The Merchandise Inventory account account balance appearing in an unadjusted trial balance under a perpetual inventory system represents the

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On a classified balance sheet, merchandise inventory is classified as a

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The cost of goods sold account

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When using a perpetual inventory system, the adjusting entry required when merchandise inventory records do not agree with the physical account

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When recording a credit sale, all of the following accounts are affected except

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Toby Co purchased 10 000 in merchandise and sold it six months later 18 000, At the time of the sale, Toby will

Grade 12 Accounting Midterm Prep

Test 4 - Chapter 5

A merchandiser differs from a service business in that it

Two categories of expenses in merchandising companies are

The primary source of revenue for a service company is

Service revenue less operating expenses is called

The operating cycle of a service company differs from that of a merchandising company in that

Which of the following formulas in incorrect

With respect to the income statement

The journal entry to record the return of merchandise purchased on account under a perpetual inventory system would credit

Under a perpetual inventory system, acquisition of merchandise for resale is debited to the

Under a perpetual inventory system, cost of goods sold is recorded

If ABC's accounting records should, using a perpetual inventory system, an ending inventory balance of $25 000 and a physical count shows $23 000, it is important to

Detailed records of goods held for resale are not maintained undera a

Babcock Co. purchased merchandise from Gerber Co. with freight terms of FOB shipping point. The freight costs will be paid by the

Wright Co. recently made a purchase of $10 000 from a major supplier. Shipping costs were $200, terms FOB shipping point. To record this purchase, Wright Co. will need to debit the

The Sales R&A account is classified as

A sales invoice is a a source document that

The journal entry to record a shortage of inventory at the end of the accounting period is

Sales revenue

A Sales R&A account is not debited if