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Exam 5: Accounting for Retail Businesses

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Question 101

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Details of invoices for purchases of merchandise are as follows: Determine the amount to be paid in full settlement of each of the invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

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(a)$2,800 - $200 - $26 + $45 =...

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Question 102

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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

A) $795
B) $685
C) $265
D) $635

E) A) and C)
F) A) and D)

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Question 103

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If the perpetual inventory system is used, an account entitled Cost of Goods Sold is included in the general ledger.

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.

Match each of the following terms (a-h) with the correct definition below. -Shipping terms where the ownership of merchandise passes to the buyer when the seller delivers the merchandise to the freight carrier. A)Credit terms B)FOB destination C)FOB shipping point D)Periodic inventory system E)Perpetual inventory system F)Inventory shrinkage G)Single-step income statement H)Multiple-step income statement

Where are selling and administrative expenses found on the multiple-step income statement?

The entry to record the return of merchandise from a customer would include a

The amount of the total cash paid to the seller for merchandise purchased for consumption would normally include

The inventory system employing accounting records that continuously disclose the amount of inventory is called

What is the term applied to the excess of sales over the cost of goods sold?

Complete the following data taken from the condensed income statements for merchandising Companies X, Y, and Z.

During the current year, merchandise is sold for $237,500 cash and $625,000 on account. The cost of the goods sold is $422,300. What is the amount of the gross profit?

If the physical count of inventory revealed $158,000 of inventory on hand and the inventory records reported $163,000, what would be the necessary adjusting entry to record inventory shrinkage?

What amount will be paid in full settlement of Invoice 22392, assuming that credit for returns and allowances was received prior to payment and that the invoice was paid within the discount period.​

Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period?

Most retailers record all credit card sales as credit sales.

The following information is available for Coulibaly Company: Calculate the asset turnover ratio for Coulibaly Company for Year 1 and Year 2.

Calculate income from operations for Jonas Company based on the following data:

Match each of the following items (a-h) with the appropriate definition below. -Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system. A)Freight B)Delivery Expense C)Inventory D)Sales discount E)Purchases Returns and Allowances F)Debit memo G)Purchases discount H)Trade discount

Income that cannot be associated definitely with operations, such as a gain from the sale of a fixed asset, is listed as Other Revenue on the multiple-step income statement.