Question 1

Quick assets include cash,inventory,and current receivables.

Accepted Answer

A) True 
 B)False

Question 2

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

Accepted Answer

A)  Sales: $136,000; gross profit: $111,000
B)  Sales: $136,000; gross profit: $85,000
C)  Sales: $85,000; gross profit: $136,000
D)  Sales: $111,000; gross profit: $136,000
E)  Sales: $60,000; gross profit: $25,000F) C) and D)
G) B) and C)

Question 3

Purchase allowances refer to merchandise a buyer acquires but then returns to the seller.

Accepted Answer

A) True 
 B)False

Question 4

The current period's ending inventory is:

Accepted Answer

A)  The next period's beginning inventory.
B)  The current period's cost of goods sold.
C)  The prior period's beginning inventory.
D)  The current period's net purchases.
E)  The current period's beginning inventory.F) A) and B)
G) A) and C)

Question 5

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Accepted Answer

The answer of A ______________________ income statement includes cost of...

Question 6

A common rule of thumb is that a company's acid-test ratio should be at least 2 or a company may face financial problems in the near future.

Accepted Answer

A) True 
 B)False

Question 7

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Accepted Answer

The answer of The __________________ inventory system continually updates accounting...

Question 8

1.Calculate the current ratio and acid-test ratio for each firm.
2.Rank the firms in decreasing order of liquidity.
3.Comment on Trico's relative liquidity position.

Accepted Answer

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Question 9

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

Accepted Answer

A)  Sales: $350,000; gross profit: $150,000
B)  Sales: $350,000; gross profit: $50,000
C)  Sales: $500,000; gross profit: $400,000
D)  Sales: $500,000; gross profit: $50,000
E)  Sales: $400,000; gross profit: $500,000F) B) and E)
G) C) and D)

Question 10

Herald Company had sales of $135,000,sales discounts of $2,000 and sales returns of $3,200.Herald Company's net sales equal:

Accepted Answer

A)  $5,200.
B)  $129,800.
C)  $133,000.
D)  $135,000.
E)  $140,200.F) All of the above
G) B) and D)

Question 11

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is true regarding the closing process of a merchandiser?

Accepted Answer

A)  Sales Discounts,Sales Returns and Allowances,and Cost of Goods sold should all be credited during closing.
B)  Sales Discounts,Sales Returns and Allowances,and Cost of Goods sold should all be debited during closing.
C)  Sales Discounts and Sales Returns and Allowances should be debited; Cost of Goods Sold should be credited during closing.
D)  Sales Discounts and Sales Returns and Allowances should be credited; Cost of Goods Sold should be debited during closing.
E)  Sales Discounts and Sales Returns and Allowances are not closed.Cost of Goods Sold should be credited during closing.F) C) and E)
G) All of the above

Question 13

A debit memorandum is:

Accepted Answer

A)  Required whenever a journal entry is recorded.
B)  The source document for the purchase of merchandise inventory.
C)  Required when a purchase discount is granted.
D)  The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's records.
E)  Not necessary in a perpetual inventory system.F) C) and D)
G) None of the above

Question 14

Cost of goods sold is reported on both the income statement and the balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

Accepted Answer

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Question 16

The agreement regarding the amounts and timing of payment from a buyer to a seller are the ____________________.

Accepted Answer

The answer of The agreement regarding the amounts and timing...

Question 17

Cost of goods sold is:

Accepted Answer

A)  Another term for merchandise sales.
B)  The cost of merchandise sold to customers.
C)  Another term for revenue.
D)  Also called gross margin.
E)  A term only used by service firms.F) A) and D)
G) A) and C)

Question 18

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 19

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 20

The operating cycle for a merchandiser that sells only for cash moves from:

Accepted Answer

A)  Purchases of merchandise to inventory to cash sales.
B)  Purchases of merchandise to inventory to accounts receivable to cash sales.
C)  Inventory to purchases of merchandise to cash sales.
D)  Accounts receivable to purchases of merchandise to inventory to cash sales.
E)  Accounts receivable to inventory to cash sales.F) A) and E)
G) All of the above

Exam 4: Reporting and Analyzing Merchandising Operations

Cost of goods sold is reported on both the income statement and the balance sheet.

Correct AnswerverifiedShow Answer

Herald Company had sales of $135,000,sales discounts of $2,000 and sales returns of $3,200.Herald Company's net sales equal:

Correct AnswerverifiedShow Answer

The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Correct AnswerverifiedShow Answer

A ______________________ income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Correct AnswerverifiedShow Answer

A company had expenses other than cost of goods sold of $51,000.Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

Correct AnswerverifiedShow Answer

Quick assets include cash,inventory,and current receivables.

Correct AnswerverifiedShow Answer

The current period's ending inventory is:

Correct AnswerverifiedShow Answer

A debit memorandum is:

Correct AnswerverifiedShow Answer

1.Calculate the current ratio and acid-test ratio for each firm. 2.Rank the firms in decreasing order of liquidity. 3.Comment on Trico's relative liquidity position.

Correct AnswerverifiedPart 1 _TB6947_00_TB6947_00_TB6947_00 _T...View AnswerShow Answer

A company had expenses other than cost of goods sold of $250,000.Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.

Correct AnswerverifiedShow Answer

Cost of goods sold is:

Correct AnswerverifiedShow Answer

Accounting and reporting for merchandise purchases and sales are treated identically under both GAAP and IFRS.

Correct AnswerverifiedShow Answer

Operating expenses are classified into two categories: selling expenses and cost of goods sold.

Correct AnswerverifiedShow Answer

Purchase allowances refer to merchandise a buyer acquires but then returns to the seller.

Correct AnswerverifiedShow Answer

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Correct AnswerverifiedShow Answer

A common rule of thumb is that a company's acid-test ratio should be at least 2 or a company may face financial problems in the near future.

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding the closing process of a merchandiser?

Correct AnswerverifiedShow Answer

The agreement regarding the amounts and timing of payment from a buyer to a seller are the ____________________.

Correct AnswerverifiedShow Answer

The operating cycle for a merchandiser that sells only for cash moves from:

Correct AnswerverifiedShow Answer

Neutron uses a periodic inventory system.Prepare general journal entries to record the following transactions for Neutron:

Correct Answerverified_TB6947_00...View AnswerShow Answer

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