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Exam 6: Accounting for Merchandising Businesses

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Question 81

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Using the following data taken from Payton Inc.which uses a periodic inventory system,prepare the cost of merchandise sold section of the income statement for the year ended May 31.​

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Question 82

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Merchandise with a list price of $4,200 and costing $2,300 is sold on account,subject to the following terms: FOB destination,2/10,n/30.The seller prepays the freight costs of $85 (debit Delivery Expense for the freight costs).Prior to payment for the goods,the seller issues a credit memo for $750 to the customer for merchandise costing $425 that is returned.Payment is received within the discount period.The company uses a perpetual inventory system.Record the foregoing transactions of the seller in the sequence indicated below.

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Question 83

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

Under the periodic inventory system,the cost of merchandise sold is recorded when sales are made.

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

Purchases of merchandise are typically credited to the merchandise inventory account under the perpetual inventory system.

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

Merchandise is purchased for $6,000 on September 2 subject to terms of 2/10,n/30,FOB destination.Freight costs paid by the seller totaled $200.What is the cost of the merchandise if paid on September 12,assuming the discount is taken?

During the current year,merchandise is sold for $117,500 cash and $241,750 on account.The cost of the merchandise sold is $157,400.What is the amount of the gross profit?

Merchandise with a sales price of $5,000 is sold on account with terms 2/10,n/30.The journal entry to record the sale would include a

The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a

Matching Match each of the following items (a-h) with the appropriate definition below. -Expense account for recording shipping costs paid by the seller.

Sales is equal to the cost of merchandise sold less the gross profit.

Under a periodic inventory system,closing entries will include

Marshall Supplies is a janitorial supply store that uses perpetual inventory.Journalize the following transactions:​ ​​ ​

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

Using the following data taken from Hsu's Imports Inc.which uses a periodic inventory system,prepare the cost of merchandise sold section of the income statement for the year ended March 31.​

Inventory shrinkage is recorded when

Using a perpetual inventory system,the entry to record the return of merchandise purchased on account includes a

A business using the perpetual inventory system,with its detailed subsidiary records,does not need to take a physical inventory.