Accounting 2000 Ch. 5

Which of the following would not be considered a merchandising company? Select one: A. Retailer B. Service firm C. All of these are considered a merchandising company. D. Wholesaler

Which of the following is a true statement about inventory systems? Select one: A. A periodic system requires cost of goods sold be determined after each sale. B. Perpetual inventory systems require more detailed inventory records. C. Periodic inventory systems require more detailed inventory records. D. A perpetual system determines cost of goods sold only at the end of the accounting period.

If a company determines cost of goods sold each time a sale occurs. it Select one: A. uses a combination of the perpetual and periodic inventory systems. B. uses a perpetual inventory system. C. must have a computer accounting system. D. uses a periodic inventory system.

Net income is gross profit less Select one: A. financing expenses. B. other expenses and losses. C. other expenses. D. operating expenses.

Paden Company purchased merchandise from Emmett Company with freight terms of FOB shipping point. The freight costs will be paid by the Select one: A. buyer. B. buyer and the seller. C. seller. D. transportation company.

The primary source of revenue for a wholesaler is Select one: A. investment income. B. the sale of merchandise C. service fees. D. the sale of fixed assets the company owns.

A merchandising company that sells directly to consumers is a Select one: A. retailer B. service company. C. wholesaler. D. broker.

In a perpetual inventory system. the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to Select one: A. Purchase Allowance. B. Sales Discounts. C. Purchase Discounts. D. Inventory

Sales revenue less cost of goods sold is called Select one: A. net profit. B. gross profit C. marginal income. D. net income.

After gross profit is calculated. operating expenses are deducted to determine Select one: A. net income B. gross margin. C. gross profit on sales. D. net margin.

A department store uses a perpetual inventory system. At year-end, the balance in the merchandise inventory account is $2 million. Assuming that the inventory records have been maintained properly, a year-end physical inventory A. will confirm that a perpetual inventory system was used correctly. B. will show that a periodic inventory system should be implemented. C. will most likely indicate less than $2 million in merchandise on hand due to unrecorded handling and related losses. D. will most likely indicate more than $2 million in merchandise on hand.

Under a perpetual inventory system, what account is debited for the acquisition of merchandise for resale? A. the Inventory account B. the Purchases account C. the Cost of Goods Sold account D. the Supplies account

Customers are more likely to pay their accounts promptly if a merchandiser offers A . a sales allowance. B. a sales return. C. free delivery. D. a sales discount.

A physical count of inventory at the end of the accounting period is required to calculate cost of goods sold under which inventory system(s)? A Sampling system B. Perpetual system C. Periodic system D. Periodic and perpetual systems

Gadget Corp. recently reported sales revenue of $775,000, gross profit of $350,000, and net income of $64,000 for its most recent fiscal year. What were the firm's operating expenses for the year? A $286,000 B $711,000 C $425,000 D $414,000

How are issues such as customer theft and spoilage addressed at year-end? A. Through a physical count. B. By reviewing perpetual sales records. C. By reviewing perpetual inventory records. D .Through barcodes and scanners.

By using a perpetual inventory system, companies can determine when to replenish inventory more timely, thus reducing: A. storage costs. B. sales returns. C. income. D. sales.

Presented here are the components in Tektron Industry's income statement. What is Tektron's Sales Revenue and Operating Expenses? No alt text provided for this image A. Sales Revenue = $205,000; Operating Expenses = $10,000 B. Sales Revenue = $260,000; Operating Expenses = $45,000 C. Sales Revenue = $205,000; Operating Expenses = $125,000 D. Sales Revenue = $10,000; Operating Expenses = $45,000

Grocery and clothing stores have benefitted by the advent of ________ and ________ to better track inventory. A. inventory listing sheets; adjusting entries B. security cameras; personal computers C. bar codes; physical inventory counts D. barcodes; scanners

"Cost of goods sold" and "gross profit" are part of which of the following? A. the operating cycle for a service company B. the income measurement process for a merchandising company C. the income measurement process for a service company D. the operating cycle for a merchandising company

Smith Inc. uses the periodic inventory system. Its purchases for the most recent year were $83,000, ending inventory was $21,000, and the cost of goods sold was $122,000. How much inventory was in stock at the beginning of the year? A.$39,000 B. $62,000 C. $60,000 D. $71,000

How do you calculate the cost of goods available for sale? A. Add freight-in to net purchases. B. Add ending inventory to cost of goods purchased. C. Add beginning inventory to cost of goods purchased. D. Determining cost of goods available for sale is unnecessary.

James Corp. uses the periodic inventory system. Its beginning inventory was $17,000, purchases of inventory for the year were $55,000, and the cost of goods sold for the year was $33,000. What was the firm's year-end inventory? A $22,000 B $72,000 C $39,000 D $88,000

A physical count of inventory at the end of the accounting period is ________________ under the periodic system to calculate cost of goods sold. A. Optional B. Required

Gadget Corp., a wholesaler, uses a periodic inventory system. At year-end, how does Gadget Corp. determine its ending inventory? A By calculating inventory sales for the year. B By calculating inventory purchases for the year. C By subtracting net income from beginning inventory. D By conducting a physical count of inventory.