FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Accounting for Merchandising Operations

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

True/False

Review LaterAdd Note

Review Later

A merchandiser's classified balance sheet reports merchandise inventory as a current asset.

A) True
B) False

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

A perpetual inventory system continually updates accounting records for inventory transactions.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

Essay

Review LaterAdd Note

___________________ refer to reductions in the selling price of merchandise sold to customers, often involving damaged or defective merchandise that a customer is willing to purchase with a decrease in the selling price.

A perpetual inventory system requires updating of the inventory account only at the beginning of an accounting period.

___________ expenses are those expenses that support a company's overall operations and include expenses related to accounting, human resource management, and financial management.

A merchandising company's operating cycle begins with the sale of merchandise and ends with the collection of cash from the sale.

Roller Blade Company uses the perpetual inventory system and had the following transactions during October: Prepare journal entries to record each of the preceding transactions.

Ceres Computer Sales uses the perpetual inventory system and had the following transactions during December. Required: Prepare the general journal entries to record these transactions.

Brig Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. Cost of goods sold equals:

The gross margin ratio equals net sales less ___________ divided by net sales.

Sales discounts can benefit a seller by decreasing the delay in receiving cash, and __________.

A company reported the following year-end information: Required: 1. Explain the purpose of the acid-test ratio. 2. Calculate the acid-test ratio for this company. 3. What does the acid-test ratio reveal about this company?

A debit to Sales Returns and Allowances and a credit to Accounts Receivable:

Prepare journal entries to record the following merchandise transactions of Geo Company, which applies the perpetual inventory system.

A buyer records the costs of shipping goods in a Delivery Expense, or transportation-out account when the buyer is responsible for these costs.

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts.

Inventory shrinkage can be computed by comparing the ___________ of inventory with recorded quantities and amounts.

Merchandise inventory:

What are the difference(s) between the periodic and the perpetual inventory systems?

Quick assets include cash, inventory, and current receivables.