Question 1

The Income summary account has a $25,000 debit balance after the revenue and expenses accounts have been closed. What does this balance represent?

Accepted Answer

A)   Additional owner investments
B)   Owner withdrawals
C)   Net income
D)   A net lossE) All of the above
F) A) and D)

Question 2

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10 net/30. Defective inventory of $200 is returned 2 days later. Which of the following entries would be made to record payment for the inventory if the payment is made within 10 days?

Accepted Answer

A)   The accounting entry would be an $800 debit to Accounts payable and an $800 credit to Cash.
B)   The accounting entry would be a $784 debit to Accounts payable, a $16 debit to Inventory and an $800 credit to Cash.
C)   The accounting entry would be a $16 debit to Inventory, an $800 debit to Accounts payable and an $816 credit to Cash.
D)   The accounting entry would be an $800 debit to Accounts payable, a $16 credit to Inventory and a $784 credit to Cash.E) B) and C)
F) A) and B)

Question 3

Merchandising consists of buying and selling products.

Accepted Answer

A) True 
 B)False

Question 4

Merchandise inventory and the cost of goods sold for the current period using periodic inventory is determined:

Accepted Answer

A)   once a year.
B)   on a quarterly basis.
C)   on a weekly basis.
D)   when a physical inventory is taken.E) C) and D)
F) B) and C)

Question 5

On which of the following does Operating income appear?

Accepted Answer

A)   Classified balance sheet
B)   Single-step income statement
C)   Multiple-step income statement
D)   Both B and CE) B) and C)
F) A) and C)

Question 6

of the following describes a sales discount?

Accepted Answer

A)   A discount given to customers if the customer pays within a certain period of time
B)   A discount given by vendors of the company pays within a certain period of time
C)   A discount given to customers for buying the floor model
D)   A discount given to customers for their loyaltyE) All of the above
F) None of the above

Exam 5: Merchandising Operations

Merchandise inventory and the cost of goods sold for the current period using periodic inventory is determined:

Correct Answer
verified

The Income summary account has a $25,000 debit balance after the revenue and expenses accounts have been closed. What does this balance represent?

Correct Answer
verified

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10 net/30. Defective inventory of $200 is returned 2 days later. Which of the following entries would be made to record payment for the inventory if the payment is made within 10 days?

Correct Answer
verified

Merchandising consists of buying and selling products.

Correct Answer
verified

On which of the following does Operating income appear?

Correct Answer
verified

of the following describes a sales discount?

Correct Answer
verified

Exam 5: Merchandising Operations

Merchandise inventory and the cost of goods sold for the current period using periodic inventory is determined:

Correct AnswerverifiedShow Answer

The Income summary account has a $25,000 debit balance after the revenue and expenses accounts have been closed. What does this balance represent?

Correct AnswerverifiedShow Answer

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10 net/30. Defective inventory of $200 is returned 2 days later. Which of the following entries would be made to record payment for the inventory if the payment is made within 10 days?

Correct AnswerverifiedShow Answer

Merchandising consists of buying and selling products.

Correct AnswerverifiedShow Answer

On which of the following does Operating income appear?

Correct AnswerverifiedShow Answer

of the following describes a sales discount?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified