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Cost of goods sold represents the value of merchandise sold to customers.

A) True
B) False

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The acid-test ratio:


A) Is also called the quick ratio.
B) Measures profitability.
C) Measures inventory turnover.
D) Is generally greater than the current ratio.
E) Is not used by merchandise companies.

F) D) and E)
G) B) and D)

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


A) Reflects an increase in amount due from a customer.
B) Recognizes that a customer returned merchandise and/or received an allowance.
C) Requires a debit memorandum to recognize the customer's return.
D) Is recorded when a customer takes a discount.
E) Reflects an increase in net sales.

F) C) and E)
G) A) and E)

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On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is:


A) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
B) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
C) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
D) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
E) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)

F) B) and E)
G) B) and D)

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

A) True
B) False

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Describe the key attributes of inventory for a merchandising company.

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Merchandise inventory is a cur...

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On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry?


A) On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry? A) B) C) D) E)
B) On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry? A) B) C) D) E)
C) On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry? A) B) C) D) E)
D) On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry? A) B) C) D) E)
E) On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 30.If the company pays for the purchase on August 7,what would be the appropriate journal entry? A) B) C) D) E)

F) All of the above
G) None of the above

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A company's quick assets are $147,000 and its current liabilities are $143,000.This company's acid-test ratio is 1.03 (rounded to two decimals).

A) True
B) False

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Expenses that support the overall operations of a business and include the expenses relating to accounting,human resource management,and financial management are called:


A) Cost of goods sold.
B) Selling expenses.
C) Purchasing expenses.
D) General and administrative expenses.
E) Nonoperating activities.

F) C) and D)
G) A) and B)

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On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is:


A) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
B) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
C) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
D) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)
E) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.On October 4,Alberts returns some of the merchandise.The selling price of the merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Robertson must make on October 4 is: A) B) C) D) E)

F) A) and B)
G) C) and D)

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A company has sales of $1,500,000,sales discounts of $102,000,sales returns and allowances of $123,000,shipping charges of $15,000,sales commissions of $34,000,net income of $263,500,and cost of goods sold of $420,000.What is the gross profit/margin for the period?


A) $ 806,000
B) $1,031,000
C) $1,182,000
D) $1,080,000
E) $ 855,000

F) None of the above
G) A) and D)

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Gross profit is the same as gross margin.

A) True
B) False

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Cash sales shorten the operating cycle for a merchandiser; credit purchases lengthen operating cycles.

A) True
B) False

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The credit terms 2/10,n/30 are interpreted as:


A) 2% cash discount if the amount is paid within 10 days,with the balance due in 30 days.
B) 10% cash discount if the amount is paid within 2 days,with balance due in 30 days.
C) 30% discount if paid within 2 days.
D) 30% discount if paid within 10 days.
E) 2% discount if paid within 30 days.

F) C) and D)
G) B) and C)

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The following information refers to Annie's Attic and its competitors in the antiques business: The following information refers to Annie's Attic and its competitors in the antiques business: Required: Comment on the relative liquidity positions of these companies. Required: Comment on the relative liquidity positions of these companies.

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Chisolm's Collectibles,Martin's Marbles,...

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The periodic inventory system uses a temporary account called Purchases.

A) True
B) False

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Mann Company uses the perpetual inventory method.After negotiations with one of its customers concerning the color of the merchandise sold to that customer,Mann allowed the customer to return all of the merchandise and issued a credit memorandum to that customer for $1,000.The merchandise,which had a cost of $750,was restored to inventory.How would the company record this transaction?


A) Debit Accounts Receivable for $1,000,debit Merchandise Inventory for $750,and credit Sales Returns and Allowances for $1,750.
B) Debit Accounts Receivable for $1,000,credit Sales Returns and Allowances for $1,000,debit Merchandise Inventory for $750,and credit Purchase Returns and Allowances for $750.
C) Debit Accounts Receivable for $1,000,credit Sales Returns and Allowances for $1,000,debit Cost of Goods Sold for $750,and credit Merchandise Inventory for $750.
D) Credit Accounts Receivable for $1,000,debit Sales Returns and Allowances for $1,000,debit Merchandise Inventory for $750,and credit Cost of Goods Sold for $750.
E) Debit Accounts Receivable for $1,000 and credit Sales Returns and Allowances for $1,000.

F) C) and E)
G) A) and B)

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A company has sales of $2,530,000,sales discounts of $200,000,sales returns and allowances of $323,000,shipping charges of $115,000,sales commissions of $234,000,net income of $863,500,and cost of goods sold of $1,012,000.What is the gross profit/margin ratio?

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Following is the year-end adjusted trial balance for Yakima's Sporting Goods for the current year: Following is the year-end adjusted trial balance for Yakima's Sporting Goods for the current year: Prepare the closing entries at December 31 for the current year. Prepare the closing entries at December 31 for the current year.

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blured image_TB6947_00...

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A period's ___________________ becomes the next period's beginning inventory.

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