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Exam 5: Accounting for Merchandising Operations

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Question 91

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Birk Company sells merchandise on account for $3,000 to Kiner Company with credit terms of 2/10, n/30.Kiner Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period.What is the amount of the check?

A) $2,940
B) $2,952
C) $2,400
D) $2,352

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Question 92

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On October 1, Belton Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each.During the month of October, the following transactions occurred. Instructions Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

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Question 93

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Which of the following would not be considered a merchandising company?

Touch Tronix, Inc.sells component parts to Advanced Communications, Inc.a cell phone manufacturer.On December 10, 2011, Touch Tronix, Inc.sold €680,000 of goods to Advanced Communications, Inc.on account for €880,000.Terms of the sale were 2/10, net 30.Advanced Communications, Inc.paid €13,000 in freight charges.On December 13, 2011, Advanced Communications, Inc.returned 5% of the goods due to inferior quality.On December 18, 2011, Advanced Communications, Inc.paid the account in full.Advanced Communications, Inc.uses a perpetual inventory system.If Advanced Communications, Inc.has not yet sold any of these goods, what is the ending balance in the inventory account after the payment is made?

196 Assume that Vangundy Company uses a periodic inventory system and has these account balances: Purchases €490,000; Purchase Returns and Allowances €14,000; Purchase Discounts €9,000; and Freight-in €15,000.Determine net purchases and cost of goods purchased.

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.

198 Slater Brothers Supply uses a periodic inventory system.During May, the following transactions and events occurred. Instructions Journalize the May transactions for Slater Brothers.You may omit explanations.

If a company is given credit terms of 2/10, n/30, it should

International Financial Reporting Standards call for companies to mark the recorded values of certain types of assets and liabilities to fair value each period.These unrealized gains and losses are excluded from net income but included in comprehensive income and include all of the following except

Under International Financial Reporting Standards (IFRS) operating expenses may be presented by nature or by function.

Financial information is presented below: Gross profit would be

In a worksheet for a merchandising company, Merchandise Inventory would appear in the

The journal entry to record a credit sale is

Logan Company made a purchase of merchandise on credit from Claude Corporation on August 3, for $3,000, terms 2/10, n/45.On August 10, Logan makes the appropriate payment to Claude.The entry on August 10 for Logan Company is

Detailed records of the cost of each inventory purchase and sale are not maintained under a

If a company determines cost of goods sold each time a sale occurs, it

Touch Tronix, Inc.sells component parts to Advanced Communications, Inc.a cell phone manufacturer.On December 10, 2011, Touch Tronix, Inc.sold €680,000 of goods to Advanced Communications, Inc.on account for €880,000.Terms of the sale were 2/10, net 30.On December 18, 2011, Advanced Communications, Inc.paid the account in full.Which of the following is true regarding the impact on the statement of financial position for Touch Tronix, Inc.when the payment is made on December 18, 2011?

During August, 2011, Joe's Supply Store generated revenues of $60,000.The company's expenses were as follows: cost of goods sold of $24,000 and operating expenses of $4,000.The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000. Joe's income from operations for the month of August, 2011 is

Cartier Company purchased inventory from Pissaro Company.The shipping costs were $400 and the terms of the shipment were FOB shipping point.Cartier would have the following entry regarding the shipping charges:

Under a perpetual inventory system, inventory shrinkage and lost or stolen goods are more readily determined.