FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 4: Accounting for Merchandising Operations

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 141

Short Answer

Review LaterAdd Note

Review Later

A seller usually prepares a ________ to confirm a buyer's return or allowance,and informs the buyer of the seller's credit to the buyer's Account Receivable on the seller's books.

Correct Answer

verified

Show Answer

Question 142

Short Answer

Review LaterAdd Note

Review Later

Under the ________ inventory accounting system,each purchase,purchase return and allowance,purchase discount,and transportation-in transaction is recorded in a separate temporary account.

Correct Answer

verified

Show Answer

Question 143

Essay

Review LaterAdd Note

Discuss the period-end adjusting entries that are required in the new revenue recognition standards for estimating sales discounts and sales returns and allowances.

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

If goods are shipped FOB shipping point,the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point.

Match the following definitions with the appropriate terms. -A measure of a company's ability to pay its current liabilities that excludes less liquid current assets such as inventory and prepaid expenses.

Fill in the blanks (a)through (g)for the Corman Company for each of the income statements for years 1 and 2. $\begin{array}{c} \text {Corman Company}\\ \text {Income Statements}\\ \text {For the years ended December 31}\\\begin{array}{|l|r|r|}\hline& \text { Year 1 } & \text { Year 2 } \\\hline \text { Sales } & \$ 10,000 & \text { (e) } \\\hline \text { Cost of goods sold } & & \\\hline \text { Merchandise inventory (beginning) } & 375 & 750 \\\hline \text { Total cost of merchandise purchases } & 3,625 & 4,875 \\\hline \text { Merchandise inventory (ending) } & 750 & (\mathrm{~d}) \\\hline \text { Cost of goods sold } & (\mathrm{a}) & \underline{5,000} \\\hline \text { Gross profit } & 6,750 & 5,200 \\\hline \text { Operating expenses } & \underline{3,750} & (\mathrm{c}) \\\hline \text { Net income } & \text { (b) } & \$ 2,500 \\\hline\end{array}\end{array}$