Question 1

Details of invoices for purchases of merchandise are as follows:

Determine the amount to be paid in full settlement of each of the invoices,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.Also assume that the seller has prepaid the transportation expenses.

Accepted Answer

(a)$817 ($1,000 + $25 - $200 -...

Question 2

Ratio of sales to assets is calculated by:

Accepted Answer

A)  dividing average total assets by net sales.
B)  dividing net sales by total current assets.
C)  dividing net sales by average total assets.
D)  dividing total current assets by net sales.E) A) and C)
F) None of the above

Question 3

For the perpetual inventory system,which of the following effects does not occur upon the return from a customer of merchandise sold on account?

Accepted Answer

A)  Increases Sales Returns and Allowances and decreases Accounts Receivable
B)  Decreases Cost of Merchandise Sold and increases Merchandise Inventory
C)  Increases Purchase Returns and Allowances and decreases Merchandise Inventory
D)  All of these occur.E) B) and D)
F) B) and C)

Question 4

Which of the following would be subtracted from gross profit to determine operating income?

Accepted Answer

A)  Operating expenses
B)  Other expenses
C)  Income taxes
D)  All of theseE) A) and B)
F) A) and C)

Question 5

On the income statement,sales discounts are normally deducted from sales to yield the cost of merchandise sold.

Accepted Answer

A) True 
 B)False

Question 6

Gross profit is equal to:

Accepted Answer

A)  sales less (sales discounts and sales returns and allowances) plus cost of merchandise sold.
B)  sales plus sales returns and allowances less sales discounts less cost of merchandise sold.
C)  sales plus sales discounts less sales returns and allowances less cost of merchandise sold.
D)  sales less (sales discounts and sales returns and allowances) less cost of merchandise sold.E) A) and B)
F) A) and C)

Question 7

Which of the following items is subtracted from sales to arrive at net sales?

Accepted Answer

A)  Desired sales
B)  Sales commission
C)  Sales returns and allowances
D)  Cost of after sales servicesE) None of the above
F) A) and C)

Question 8

Prepare a multiple-step income statement for Surry Co.from the following data for the year ended December 31,2016.

Accepted Answer

Surry Co. Income Statement For the Year ...

Question 9

If the seller is to pay the delivery expense of delivering merchandise,the delivery terms are stated as:

Accepted Answer

A)  FOB shipping point.
B)  FOB destination.
C)  FOB n/30.
D)  FOB seller.E) B) and C)
F) A) and D)

Question 10

Based on the following data,determine the cost of merchandise sold for October.

Accepted Answer

Cost of merchandise sold: 7,620 Merchand...

Question 11

If merchandise costing $2,500,terms FOB destination,2/10,n/30,with transportation costs of $100,is paid within 10 days,the amount of the purchases discount is $52.

Accepted Answer

A) True 
 B)False

Question 12

If payment is due by the end of the month in which the sale is made,the invoice terms are expressed as n/eom.

Accepted Answer

A) True 
 B)False

Question 13

Refer to Surist,Inc.What is the total cost of merchandise purchased?

Accepted Answer

A)  $312,000
B)  $287,000
C)  $263,000
D)  $288,000E) C) and D)
F) A) and D)

Question 14

Which of the following is not considered when figuring net purchases?

Accepted Answer

A)  Cost of goods sold
B)  Purchase returns
C)  Purchases discounts
D)  PurchasesE) A) and C)
F) B) and D)

Question 15

If the buyer is to pay the delivery expense of delivering merchandise,delivery terms are stated as:

Accepted Answer

A)  FOB shipping point.
B)  FOB destination.
C)  FOB n/30.
D)  FOB buyer.E) None of the above
F) A) and D)

Question 16

When merchandise that was sold is returned,the seller decreases accounts payable.

Accepted Answer

A) True 
 B)False

Question 17

Investing activities include:

Accepted Answer

A)  collecting cash on loans made.
B)  obtaining cash from creditors.
C)  obtaining capital from owners.
D)  repaying money previously borrowed.E) A) and B)
F) B) and C)

Question 18

Merchandise with an invoice price of $10,000 is purchased subject to terms of 2/10,n/30,FOB destination.Transportation costs paid by the seller totaled $300.What is the net cost of the merchandise?

Accepted Answer

A)  $10,300
B)  $10,100
C)  $9,800
D)  $9,506E) C) and D)
F) B) and D)

Question 19

If a $50,000 sale is made on January 1,with terms of 1/10,n/30,how much would the discount be if payment is made on January 9?

Accepted Answer

A)  $0
B)  $5,000
C)  $1,000
D)  $500E) A) and B)
F) None of the above

Question 20

Available discounts taken by the buyer for early payment of an invoice are termed sales discounts by the seller.

Accepted Answer

A) True 
 B)False

Exam 4: Accounting for Merchandising Businesses

Which of the following is not considered when figuring net purchases?

Correct Answer
verified

Which of the following would be subtracted from gross profit to determine operating income?

Correct Answer
verified

If payment is due by the end of the month in which the sale is made,the invoice terms are expressed as n/eom.

Correct Answer
verified

Based on the following data,determine the cost of merchandise sold for October.

Correct Answer
verified
Cost of merchandise sold: 7,620 Merchand...
View Answer

Gross profit is equal to:

Correct Answer
verified

Which of the following items is subtracted from sales to arrive at net sales?

Correct Answer
verified

If merchandise costing $2,500,terms FOB destination,2/10,n/30,with transportation costs of $100,is paid within 10 days,the amount of the purchases discount is $52.

Correct Answer
verified

When merchandise that was sold is returned,the seller decreases accounts payable.

Correct Answer
verified

If the buyer is to pay the delivery expense of delivering merchandise,delivery terms are stated as:

Correct Answer
verified

If the seller is to pay the delivery expense of delivering merchandise,the delivery terms are stated as:

Correct Answer
verified

Refer to Surist,Inc.What is the total cost of merchandise purchased?

Correct Answer
verified

Ratio of sales to assets is calculated by:

Correct Answer
verified

Investing activities include:

Correct Answer
verified

On the income statement,sales discounts are normally deducted from sales to yield the cost of merchandise sold.

Correct Answer
verified

For the perpetual inventory system,which of the following effects does not occur upon the return from a customer of merchandise sold on account?

Correct Answer
verified

Prepare a multiple-step income statement for Surry Co.from the following data for the year ended December 31,2016.

Correct Answer
verified
Surry Co. Income Statement For the Year ...
View Answer

Merchandise with an invoice price of $10,000 is purchased subject to terms of 2/10,n/30,FOB destination.Transportation costs paid by the seller totaled $300.What is the net cost of the merchandise?

Correct Answer
verified

If a $50,000 sale is made on January 1,with terms of 1/10,n/30,how much would the discount be if payment is made on January 9?

Correct Answer
verified

Available discounts taken by the buyer for early payment of an invoice are termed sales discounts by the seller.

Correct Answer
verified

Correct Answer
verified
(a)$817 ($1,000 + $25 - $200 -...
View Answer

Exam 4: Accounting for Merchandising Businesses

Which of the following is not considered when figuring net purchases?

Correct AnswerverifiedShow Answer

Which of the following would be subtracted from gross profit to determine operating income?

Correct AnswerverifiedShow Answer

If payment is due by the end of the month in which the sale is made,the invoice terms are expressed as n/eom.

Correct AnswerverifiedShow Answer

Based on the following data,determine the cost of merchandise sold for October.

Correct AnswerverifiedCost of merchandise sold: 7,620 Merchand...View AnswerShow Answer

Gross profit is equal to:

Correct AnswerverifiedShow Answer

Which of the following items is subtracted from sales to arrive at net sales?

Correct AnswerverifiedShow Answer

If merchandise costing $2,500,terms FOB destination,2/10,n/30,with transportation costs of $100,is paid within 10 days,the amount of the purchases discount is $52.

Correct AnswerverifiedShow Answer

When merchandise that was sold is returned,the seller decreases accounts payable.

Correct AnswerverifiedShow Answer

If the buyer is to pay the delivery expense of delivering merchandise,delivery terms are stated as:

Correct AnswerverifiedShow Answer

If the seller is to pay the delivery expense of delivering merchandise,the delivery terms are stated as:

Correct AnswerverifiedShow Answer

Refer to Surist,Inc.What is the total cost of merchandise purchased?

Correct AnswerverifiedShow Answer

Ratio of sales to assets is calculated by:

Correct AnswerverifiedShow Answer

Investing activities include:

Correct AnswerverifiedShow Answer

On the income statement,sales discounts are normally deducted from sales to yield the cost of merchandise sold.

Correct AnswerverifiedShow Answer

For the perpetual inventory system,which of the following effects does not occur upon the return from a customer of merchandise sold on account?

Correct AnswerverifiedShow Answer

Prepare a multiple-step income statement for Surry Co.from the following data for the year ended December 31,2016.

Correct AnswerverifiedSurry Co. Income Statement For the Year ...View AnswerShow Answer

Merchandise with an invoice price of $10,000 is purchased subject to terms of 2/10,n/30,FOB destination.Transportation costs paid by the seller totaled $300.What is the net cost of the merchandise?

Correct AnswerverifiedShow Answer

If a $50,000 sale is made on January 1,with terms of 1/10,n/30,how much would the discount be if payment is made on January 9?

Correct AnswerverifiedShow Answer

Available discounts taken by the buyer for early payment of an invoice are termed sales discounts by the seller.

Correct AnswerverifiedShow Answer

Correct Answerverified(a)$817 ($1,000 + $25 - $200 -...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cost of merchandise sold: 7,620 Merchand...
View 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Surry Co. Income Statement For the Year ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a)$817 ($1,000 + $25 - $200 -...
View Answer