Question 1

On December 31,2018,you count 600 backpacks in inventory.During the next quarter,you carefully record the effect of each purchase and sale transaction on inventory.You buy 256 backpacks during the next quarter.On March 31,2019,you count 576 backpacks in inventory.Which of the following is not correct?

Accepted Answer

A)  Ending inventory on March 31,2019 should be 576 backpacks.
B)  Your company uses the perpetual inventory method.
C)  Your company's records would show that 280 backpacks were sold during the quarter.
D)  The amount of shrinkage cannot be determined with this type of inventory system.E) B) and C)
F) A) and B)

Question 2

When a periodic inventory system is in use,at the end of each period a "book-to-physical" adjustment will be made to reduce inventory for shrinkage.

Accepted Answer

A) True 
 B)False

Question 3

Match the term to the appropriate definition.There are more definitions than terms.
-Sales Returns & Allowances

Accepted Answer

A)  Presents important subtotals,such as gross profit,to help distinguish core operating results from other,less significant items that affect net income.
B)  A reduction in the cost of inventory purchases associated with unsatisfactory goods.
C)  Refunds and price reductions given to customers after goods have been sold and found unsatisfactory.
D)  A ratio indicating the percentage of profit earned on each dollar of sales,after considering the cost of products sold.
E)  Net sales minus cost of goods sold.It is a subtotal,not an account.F) A sales price reduction given to customers for prompt payment of their account balance.G) The sum of beginning inventory and purchases for the period.H) A cash discount received for prompt payment of a purchase on account.I) Assets acquired for resale to customers.J) The cost of inventory lost to theft,fraud,and error.K) D) and I)
L) G) and I)

Question 4

Which of the following line items below is present in both the multistep income statement and an income statement in which expenses are simply subtracted from revenues to arrive at net income?

Accepted Answer

A)  Income before income tax expense
B)  Income from operations
C)  Net income
D)  Gross profitE) B) and D)
F) A) and C)

Question 5

The gross profit percentage is the ratio to watch if you are worried about increased competition.If the company lowers its prices to retain market share without lowering its cost of goods sold,its gross profit percentage will:

Accepted Answer

A)  increase.
B)  decrease.
C)  stay the same.
D)  equal zero.E) None of the above
F) A) and B)

Question 6

Palm Industries had cost of goods sold of $40,000.If purchases were $46,000 and ending inventory was $12,000,Ace's beginning inventory must have been:

Accepted Answer

A)  $6,000.
B)  $18,000.
C)  $52,000.
D)  $34,000.E) B) and C)
F) A) and B)

Question 7

Match the term to the appropriate definition.There are more definitions than terms.
-Gross Profit Percentage

Accepted Answer

A)  A ratio indicating the percentage of profit earned on each dollar of sales,after considering the cost of products sold.
B)  A sales price reduction given to customers for prompt payment of their account balance.
C)  Presents important subtotals,such as gross profit,to help distinguish core operating results from other,less significant items that affect net income.
D)  Expresses the relationship between inventory on hand,purchased,and sold;shown as either BI + P - EI = CGS or BI + P - CGS = EI.
E)  Refunds and price reductions given to customers after goods have been sold and found unsatisfactory.F) A cash discount received for prompt payment of a purchase on account.G) The cost of inventory lost to theft,fraud,and error.H) Net sales minus cost of goods sold.It is a subtotal,not an account.I) A reduction in the cost of inventory purchases associated with unsatisfactory goods.J) The sum of beginning inventory and purchases for the period.K) C) and E)
L) C) and D)

Question 8

On October 1,Robertson Company sold inventory in the amount of $5,800 to Alberta,Inc.with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses a periodic inventory system.The journal entry (or entries) prepared by Robertson on October 1 is(are) :

Accepted Answer

A)  Debit Sales Revenue and credit Accounts Receivable for $5,800.
B)  Debit Sales Revenue and credit Accounts Receivable for $5,800;debit Cost of Goods Sold and credit Inventory for $4,000.
C)  Debit Accounts Receivable and credit Sales Revenue for $5,800.
D)  Debit Accounts Receivable and credit Sales Revenue for $5,800;Debit Cost of Goods Sold and credit Inventory for $4,000.E) B) and C)
F) A) and D)

Question 9

The five-step revenue model requires:

Accepted Answer

A)  sales revenue to be reported at the amount the seller expects to be entitled to receive from customers.
B)  recording sales returns and allowances at the time of the sale.
C)  a sales return that results in issuing store credit to be accounted for with a credit to Cash.
D)  only actual sales allowances to be accounted for with an adjustment.E) A) and B)
F) C) and D)

Exam 6: Merchandising Operations and the Multistep Income Statement

When a periodic inventory system is in use,at the end of each period a "book-to-physical" adjustment will be made to reduce inventory for shrinkage.

Correct Answer
verified

The gross profit percentage is the ratio to watch if you are worried about increased competition.If the company lowers its prices to retain market share without lowering its cost of goods sold,its gross profit percentage will:

Correct Answer
verified

Correct Answer
verified

Match the term to the appropriate definition.There are more definitions than terms. -Gross Profit Percentage

Correct Answer
verified

On October 1,Robertson Company sold inventory in the amount of $5,800 to Alberta,Inc.with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses a periodic inventory system.The journal entry (or entries) prepared by Robertson on October 1 is(are) :

Correct Answer
verified

Match the term to the appropriate definition.There are more definitions than terms. -Sales Returns & Allowances

Correct Answer
verified

Palm Industries had cost of goods sold of $40,000.If purchases were $46,000 and ending inventory was $12,000,Ace's beginning inventory must have been:

Correct Answer
verified

Which of the following line items below is present in both the multistep income statement and an income statement in which expenses are simply subtracted from revenues to arrive at net income?

Correct Answer
verified

The five-step revenue model requires:

Correct Answer
verified

Exam 6: Merchandising Operations and the Multistep Income Statement

When a periodic inventory system is in use,at the end of each period a "book-to-physical" adjustment will be made to reduce inventory for shrinkage.

Correct AnswerverifiedShow Answer

The gross profit percentage is the ratio to watch if you are worried about increased competition.If the company lowers its prices to retain market share without lowering its cost of goods sold,its gross profit percentage will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Gross Profit Percentage

Correct AnswerverifiedShow Answer

On October 1,Robertson Company sold inventory in the amount of $5,800 to Alberta,Inc.with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses a periodic inventory system.The journal entry (or entries) prepared by Robertson on October 1 is(are) :

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Sales Returns & Allowances

Correct AnswerverifiedShow Answer

Palm Industries had cost of goods sold of $40,000.If purchases were $46,000 and ending inventory was $12,000,Ace's beginning inventory must have been:

Correct AnswerverifiedShow Answer

Which of the following line items below is present in both the multistep income statement and an income statement in which expenses are simply subtracted from revenues to arrive at net income?

Correct AnswerverifiedShow Answer

The five-step revenue model requires:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified