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Exam 5: Accounting for Merchandising Businesses

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Question 1

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Which account is not classified as a selling expense?

A) Sales Salaries
B) Delivery Expense
C) Cost of Goods Sold​
D) Advertising Expense

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Question 2

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Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.

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Question 3

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During the current year,merchandise is sold for $86,000 cash and for $93,950 on account.The cost of the goods sold is $76,240.What is the amount of the gross profit?

Determine the amount to be paid in full settlement of each invoice,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

Buyers and sellers do not normally record the list prices of merchandise and the trade discounts in accounts.

In credit terms of 3 / 15,n / 45,the "3" represents the

Service businesses provide services for income,while a merchandising business sells merchandise.

Who is responsible for the freight costs when the terms are FOB shipping point?

When merchandise that was sold is returned,a credit to Customer Refunds Payable is made.

If merchandise costing $3,500,terms FOB destination,2 / 10,n / 30,with prepaid freight costs of $125,is paid within 10 days,the amount of the purchases discount is $70.

Expenses that are incurred directly or entirely in connection with the selling of merchandise are classified as

Using the perpetual inventory system,journalize the entries for the following selected transactions:

A company using the periodic inventory system has inventory costing $210 on hand at the beginning of a period.During the period,merchandise costing $635 is purchased.At year-end,inventory costing $160 is on hand.The cost of goods sold for the year is

Gadget Palace is a retailer selling unique hardware.Gadget Palace uses a perpetual inventory system.Journalize the following transactions: ​

The following data for the current year ended June 30 are from the accounting records of Zanadu Co.: ​ Prepare a multiple-step income statement for the year ended June 30.

When the three sections of a balance sheet are presented on a page in a downward sequence,it is called the

Inventory normally has a debit balance.

The account form of the balance sheet is presented in a downward sequence in three sections.

The arrangements between buyer and seller as to when payments for merchandise are to be made are called

Inventory is classified on the balance sheet as a