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Exam 5: Merchandising Operations

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Question 31

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For each of the following statements,state whether it applies to a periodic inventory system (periodic)or a perpetual inventory system (perpetual).

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Question 32

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When a company that uses the perpetual inventory system sells goods for cash,the journal entry to record cost of goods sold is:

A)

B) No journal entry is required.
C)

D)

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

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Question 33

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The Merchandise Inventory account balance is $52,000.A physical count of inventory reveals that the actual inventory balance is $41,000.Which of the following would be included in the adjusting entry? (Assume a perpetual inventory system. )

Under the perpetual inventory system,the adjusting journal entries to record estimated sales returns (the original sales were on account) would be:

The following information relates to Sports Bikes,Inc. Calculate the operating income.

In a periodic inventory system,merchandise inventory and purchasing systems are integrated with the records for Accounts Receivable and Sales Revenue.

In a periodic inventory system,a sale of inventory involves two entries,one to record Sales Revenue and one to record Cost of Goods Sold.

Rogers Motorsports selected accounts as of December 31,2018,follow: Prepare the multi-step income statement for the year ended December 31,2018.

A merchandiser adjusts and closes accounts differently than a service entity does.

Cost of Goods Sold is based on the company's cost,not the retail price.

Forever Jewelers uses the perpetual inventory system.On April 2,Forever sold merchandise with a cost of $4,500 for $7,000 to a customer on account with terms of 2/15,n/30.Which of the following journal entries correctly records the sales revenue?

Journalize the following purchase transactions for Main Street Office Supplies using the periodic inventory system.Explanations are not required.

In a perpetual inventory system,the Cost of Goods Sold account is debited at the time of each sale.

York Merchandising Company uses a perpetual inventory system.At the end of the accounting period,a physical count of merchandise inventory reveals a balance of $76,500.The books show a balance of $78,200. (a)Prepare the adjusting entry.Omit explanation. (b)Discuss the possible causes for the difference between the physical count and the balance in the books. (c)How does this affect net income?

The balance sheet of a merchandiser looks the same as the balance sheet of a retailer,except merchandisers have the following additional current liability accounts: Estimated Returns Inventory and Refunds Payable.

Gross profit percentage reflects a business's ability to raise selling prices.

Complete Electronics Inc.sells a point-of-sale computer with a two-year service contract.Complete collects $3,000 cash for the selling price of the computer and $576 for the two-year service contract.How is revenue recognized?

In a perpetual inventory system,the physical count of inventory ________,

If a physical count of inventory indicates that the Merchandise Inventory account is overstated,an adjusting entry is required to record the difference.Assume a perpetual inventory system is used.

Centennial,Inc.sold goods on credit terms n/20 to Harper,Inc.This means no discounts are offered,and the amount of the invoice is due 20 days after the invoice date.