Question 1

On 1 November 2016,Everett Janitorial Supply sold inventory on credit for $5 500,including GST,FOB destination,2/10,n/30.The inventory cost Everett $3 200,net of GST.What is the journal entry that records Cost of sales?

Accepted Answer

A)     Inventory 5500 Cost of sales 5500\begin{array} { | c | r | r | } \hline 	ext { Inventory } & 5500 & \\hline 	ext { Cost of sales } & & 5500 \\hline\end{array} Inventory  Cost of sales ​5500​5500​​ 
B)     Cost of sales 3200 Inventory 3200\begin{array} { | c | r | r | } \hline 	ext { Cost of sales } & 3200 & \\hline 	ext { Inventory } & & 3200 \\hline\end{array} Cost of sales  Inventory ​3200​3200​​ 
C)     Inventory 3200 Cost of sales 3200\begin{array} { | c | r | r | } \hline 	ext { Inventory } & 3200 & \\hline 	ext { Cost of sales } & & 3200 \\hline\end{array} Inventory  Cost of sales ​3200​3200​​ 
D)     Cost of sales 5500 Inventory 5500\begin{array} { | c | r | r | } \hline 	ext { Cost of sales } & 5500 & \\hline 	ext { Inventory } & & 5500 \\hline\end{array} Cost of sales  Inventory ​5500​5500​​

Question 2

What is the difference between a sales return and a sales allowance?

Accepted Answer

A)   A sales return involves an adjustment to Inventory, but a sales allowance does not.
B)   A sales return requires a debit to Sales returns and allowances, but a sales allowance does not.
C)   A sales return reduces the amount receivable from the customer, but an allowance does not.
D)   A sales allowance is deducted from Sales revenue to calculate net sales, but a sales return is not.

Question 3

Which of the following describes Net sales revenue?

Accepted Answer

A)   Sales less Cost of sales
B)   Sales less Sales discounts
C)   Sales less Sales discounts less Sales returns and allowances
D)   Sales less Sales returns and allowances

Question 4

Which of the following assets MUST a retailing business have for daily operations?

Accepted Answer

A)   Accounts receivable
B)   Equipment
C)   Prepaid insurance
D)   Inventory

Question 5

GST is a flat percentage charge levied on the supply of goods and services.

Accepted Answer

A) True 
 B)False

Question 6

The perpetual inventory system keeps a running record of inventory and cost of sales.

Accepted Answer

A) True 
 B)False

Question 7

The terms on an invoice are 3/10,n/25.This means that a:

Accepted Answer

A)   discount of 3% is allowed if the invoice is paid in 10 days.
B)   discount of 10% is allowed if the invoice is paid in three days.
C)   discount of 25% is allowed if the invoice is paid in 10 days.
D)   discount of 3% is allowed if the invoice is paid after 25 days.

Question 8

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2% if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following defines Net sales revenue?

Accepted Answer

A)   Sales revenue less Operating expenses
B)   Sales revenue less Sales discounts
C)   Sales revenue less Sales returns and allowances and Sales discounts
D)   Sales revenue less Cost of sales

Question 10

Under a perpetual inventory system,which of the following would NOT be required?

Accepted Answer

A)   A weekly count of the inventory
B)   Updating the inventory balance with each sale
C)   Detailed inventory records
D)   Recording cost of sales with each sale

Question 11

Which of the following is subtracted from Gross profit to arrive at Net profit?

Accepted Answer

A)   Cost of goods available for sale
B)   Operating expenses
C)   Cost of sales
D)   Sales discounts and Sales returns and allowances

Question 12

Gilbert Ltd generated sales revenues of $1,400,000 in the year 2017.Its cost of sales amounted to  $560,000.\$ 560,000 .$560,000.  Calculate Gilbert's gross profit percentage.(Round your answer to the nearest whole percentage.)

Accepted Answer

A)   250%
B)   167%
C)   60%
D)   40%

Question 13

If a firm uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

Accepted Answer

A)   Cost of goods available for sale
B)   Ending inventory
C)   Purchase discounts and Purchase returns and allowances
D)   Beginning inventory

Question 14

A sales return is recorded with a credit to Inventory.

Accepted Answer

A) True 
 B)False

Question 15

All else being equal,a firm that is not registered for GST is likely to report a higher profit than a registered firm.

Accepted Answer

A) True 
 B)False

Question 16

Calculate the cost of sales for a retailer using the periodic inventory system from the following details.
  Purchases $520,000 Beginning inventory 180,000 Purchase returns and allowances 50,000 Purchase discounts 12,000 Freight in 18,000 Ending inventory 180,000\begin{array} { | l | l | } \hline 	ext { Purchases } & \$ 520,000 \\hline 	ext { Beginning inventory } & 180,000 \\hline 	ext { Purchase returns and allowances } & 50,000 \\hline 	ext { Purchase discounts } & 12,000 \\hline 	ext { Freight in } & 18,000 \\hline 	ext { Ending inventory } & 180,000 \\hline\end{array} Purchases  Beginning inventory  Purchase returns and allowances  Purchase discounts  Freight in  Ending inventory ​$520,000180,00050,00012,00018,000180,000​​

Accepted Answer

A)   $520,000
B)   $476,000
C)   $836,000
D)   $494,000

Question 17

Gross profit is equal to Sales revenue less Sales returns and allowances and Sales discounts.

Accepted Answer

A) True 
 B)False

Question 18

A sales allowance is recorded with a credit to Accounts receivable.

Accepted Answer

A) True 
 B)False

Question 19

A firm uses the periodic inventory method.Which of the following entries would be made to record a $1 100 purchase of inventory on credit,including GST?

Accepted Answer

A)   The accounting entry would be a $1 000 debit to Inventory, a $100 debit to GST clearing and a $1 100 credit to Accounts payable.
B)   The accounting entry would be a $1 100 debit to Accounts payable and a $1 100 credit to Purchases.
C)   The accounting entry would be a $1 000 debit to Purchases, a $100 debit to GST clearing and a $1 100 credit to Accounts payable.
D)   The accounting entry would be a $1 100 debit to Accounts payable, a $1 000 credit to Inventory and a $100 credit to GST clearing.

Exam 5: Retailing Operations

If a firm uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

Correct Answer
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What is the difference between a sales return and a sales allowance?

Correct Answer
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Under a perpetual inventory system,which of the following would NOT be required?

Correct Answer
verified

GST is a flat percentage charge levied on the supply of goods and services.

Correct Answer
verified

Correct Answer
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A sales allowance is recorded with a credit to Accounts receivable.

Correct Answer
verified

A sales return is recorded with a credit to Inventory.

Correct Answer
verified

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2% if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

Correct Answer
verified

Gross profit is equal to Sales revenue less Sales returns and allowances and Sales discounts.

Correct Answer
verified

The terms on an invoice are 3/10,n/25.This means that a:

Correct Answer
verified

Which of the following defines Net sales revenue?

Correct Answer
verified

All else being equal,a firm that is not registered for GST is likely to report a higher profit than a registered firm.

Correct Answer
verified

Which of the following is subtracted from Gross profit to arrive at Net profit?

Correct Answer
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Which of the following describes Net sales revenue?

Correct Answer
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The perpetual inventory system keeps a running record of inventory and cost of sales.

Correct Answer
verified

Which of the following assets MUST a retailing business have for daily operations?

Correct Answer
verified

On 1 November 2016,Everett Janitorial Supply sold inventory on credit for $5 500,including GST,FOB destination,2/10,n/30.The inventory cost Everett $3 200,net of GST.What is the journal entry that records Cost of sales?

Correct Answer
verified

Gilbert Ltd generated sales revenues of $1,400,000 in the year 2017.Its cost of sales amounted to $\$ 560,000 .$ Calculate Gilbert's gross profit percentage.(Round your answer to the nearest whole percentage.)

Correct Answer
verified

A firm uses the periodic inventory method.Which of the following entries would be made to record a $1 100 purchase of inventory on credit,including GST?

Correct Answer
verified

Exam 5: Retailing Operations

If a firm uses the periodic inventory method,which of the following is subtracted from Purchases to arrive at Net purchases?

Correct AnswerverifiedShow Answer

What is the difference between a sales return and a sales allowance?

Correct AnswerverifiedShow Answer

Under a perpetual inventory system,which of the following would NOT be required?

Correct AnswerverifiedShow Answer

GST is a flat percentage charge levied on the supply of goods and services.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A sales allowance is recorded with a credit to Accounts receivable.

Correct AnswerverifiedShow Answer

A sales return is recorded with a credit to Inventory.

Correct AnswerverifiedShow Answer

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2% if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

Correct AnswerverifiedShow Answer

Gross profit is equal to Sales revenue less Sales returns and allowances and Sales discounts.

Correct AnswerverifiedShow Answer

The terms on an invoice are 3/10,n/25.This means that a:

Correct AnswerverifiedShow Answer

Which of the following defines Net sales revenue?

Correct AnswerverifiedShow Answer

All else being equal,a firm that is not registered for GST is likely to report a higher profit than a registered firm.

Correct AnswerverifiedShow Answer

Which of the following is subtracted from Gross profit to arrive at Net profit?

Correct AnswerverifiedShow Answer

Which of the following describes Net sales revenue?

Correct AnswerverifiedShow Answer

The perpetual inventory system keeps a running record of inventory and cost of sales.

Correct AnswerverifiedShow Answer

Which of the following assets MUST a retailing business have for daily operations?

Correct AnswerverifiedShow Answer

On 1 November 2016,Everett Janitorial Supply sold inventory on credit for $5 500,including GST,FOB destination,2/10,n/30.The inventory cost Everett $3 200,net of GST.What is the journal entry that records Cost of sales?

Correct AnswerverifiedShow Answer

Gilbert Ltd generated sales revenues of $1,400,000 in the year 2017.Its cost of sales amounted to $560,000.\$ 560,000 .$560,000. Calculate Gilbert's gross profit percentage.(Round your answer to the nearest whole percentage.)

Correct AnswerverifiedShow Answer

A firm uses the periodic inventory method.Which of the following entries would be made to record a $1 100 purchase of inventory on credit,including GST?

Correct AnswerverifiedShow Answer

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Gilbert Ltd generated sales revenues of $1,400,000 in the year 2017.Its cost of sales amounted to $\$ 560,000 .$ Calculate Gilbert's gross profit percentage.(Round your answer to the nearest whole percentage.)

Correct Answer
verified

Correct Answer
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