Chapter 6 – Accounting for Merchandising Businesses – Flashcards
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cost of merchandise sold.
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The difference between a service company's and a merchandising company's income statements is that the merchandising company includes
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current asset.
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Merchandise inventory is reported as a(n)
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$98,000
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During the month, merchandise is sold for $80,500 cash and for $119,000 on account. The cost of merchandise sold is $101,500. What is the amount of gross profit?
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$359,340
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Determine sales for the month using the following information. At month end, cost of merchandise sold is $191,350 and gross profit is $167,990.
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$34,300
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The Banks Company sold merchandise on account for $35,000 with terms 2/10, n/30. The cost of merchandise sold was $27,600. If the invoice is paid in the discount period, what is the amount of cash received by Banks Company?
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Debit to Accounts Receivable, $34,200; credit to Sales, $34,200
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The Geo Company sold merchandise on account for $35,000 with terms 2/10, n/30. The cost of merchandise sold was $27,600. Which of the following journal entries will be recorded for the sale of merchandise?
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Credit to Cash, $49,500
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Global Company purchased merchandise on account from Planet Company for $56,000 with terms 1/15, net 45. Global Company returned $6,000 of the merchandise and received full credit from Planet Company. Which of the following will be included in the journal entry for the payment (assume that the amount due was paid within the discount period)?
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when the payments for merchandise are to made.
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Credit terms are terms for
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sales.
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In the multiple-step income statement, cost of merchandise sold is subtracted from
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less cost of merchandise sold.
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Gross profit is sales
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added to income from operations.
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Other income is
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less (sales returns and allowances plus sales discounts).
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sales is equal to sales
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Sales
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The first closing entry for a merchandising business will include which of the following?
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Cost of Merchandise Sold.
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The second closing entry for a merchandising business will include which of the following?
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Sales.
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The first closing entry for a merchandising business will include which of the following?
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a debit to Cost of Merchandise Sold for $2,400.
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The inventory records of Garden Company indicate that $92,300 of merchandise should be on hand at the end of the month. The physical inventory indicates that $89,900 is actually on hand. The journal entry to adjust inventory shrinkage will include
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the average of total assets from previous and current balance sheets.
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In the ratio of sales to assets, the assets consist of
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Sales / Average Total Assets.
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The ratio of sales to assets is computed as
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1.25
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The following financial statement data for the year ending December 31 for Agency Company is shown below. What is the ratio of sales to assets for the year?
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all are correct
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When using the ratio of sales to assets, which of the following are true?
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profit before deducting operating expenses.
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Gross profit is
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expense
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Cost of merchandise sold is reported as a(n)
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credit to merchandise inventory 882
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Garden Company sold merchandise to Mamouth Industries on account for $3,450 with terms 2/10, n/30. The cost of merchandise sold was $1,850. Garden Company refunded Mamouth Industries $900 for returned merchandise. The cost of merchandise sold was $600. Which of the following will be recorded by Mamouth Industries in the journal entry for the return using the perpetual inventory system?
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each purchase and sale of inventory is recorded in the inventory account.
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In a perpetual inventory system
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100800
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Determine the income from operations using the following information:
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73710
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determine net income using the following amounts: rent revenue is $1,560; interest expense is $2,970; and income from operations is $75,120.
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the owners capital account
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The fourth closing entry is to close the owner's drawing account to
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Net loss equals $55,215.
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After the first two closing entries have been posted, Income Summary has a debit of $153,690 and a credit of $98,475. Which of the following is true?
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1.50
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The following financial statement data for the year ending December 31 for Aero Company is shown below.
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a favorable trend in using assets to generate sales.
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A change in the ratio of sales to assets from 1.3 to 1.6 would indicate
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sales
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The numerator in the ratio of sales to assets is
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debit to Merchandise Inventory equal to the end-of period physical inventory amount.
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When using the periodic inventory system, the first closing entry will include a
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All of these choices are correct.
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The operating cycle of a business is comprised of
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Debit to Customer Refunds Payable, $900
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Global Company sold merchandise to Montana Industries for cash, $3,450. The cost of merchandise sold was $1,850. Global Company refunded Montana Industries $900 for returned merchandise. The cost of merchandise sold was $600. Which of the following will be recorded by Global Company in the journal entry for the refund from the sale?
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less operating expenses
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Income from operations is gross profit
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a debit to Cost of Merchandise Sold for $1,900.
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The inventory records of Global Company indicate that $76,800 of merchandise should be on hand at the end of the month. The physical inventory indicates that $74,900 is actually on hand. The journal entry to adjust inventory shrinkage will include
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an unfavorable trend in using assets to generate sales.
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A change in the ratio of sales to assets from 2.0 to 1.8 would indicate
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a contra purchases account.
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Purchases Discounts is
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merchandise inventory.
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The difference between a service company's and a merchandising company's balance sheets is that the merchandising company includes
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50400
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Determine the income from operations using the following information:
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. is to transfer the net income or loss to the capital account.
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The third closing entry
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1.50
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The following financial statement data for the year ending December 31 for Aero Company is shown below.
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16000
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During the month, merchandise is sold for $23,500 cash and for $34,000 on account. The cost of merchandise sold is $41,500. What is the amount of gross profit?
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75240
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Garden Company purchased merchandise on account from Parker Company for $88,000 with terms 1/15, net 45. Garden Company returned $12,000 of the merchandise and received full credit from Parker Company. If Garden Company pays within the discount period, what is the amount of cash required for payment?
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1 and 4
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Under the periodic inventory system, which of the following accounts increase with a debit and have a normal debit balance? Purchases Purchases Discount Purchases Returns and Allowances Freight In
