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Exam 5: Accounting for Retail Businesses

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Question 121

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Using the following information for a periodic inventory system, what is the amount of gross profit?

A) $25,300
B) $31,670
C) $30,600
D) $62,840

E) None of the above
F) All of the above

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Question 122

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Gross profit is equal to

A) sales plus cost of goods sold
B) sales plus selling expenses
C) sales less selling expenses
D) sales less cost of goods sold

E) B) and C)
F) C) and D)

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Question 123

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Match each of the following items (a-h) with the appropriate definition below. -The cost associated with delivery of merchandise to the customer.

Match the correct definition with the following terms below.

The following information is available for Coulibaly Company: Calculate the asset turnover ratio for Coulibaly Company for Year 1 and Year 2.

Journalize the following transactions for the Evans Company. Assume the company uses a perpetual inventory system. ​

If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.

Match each of the following terms (a-h) with the correct definition below. -Inventory system that updates the inventory account only at the end of the accounting period based on a physical count of inventory on hand.

Bradford Company had sales of $700,000 for a year. The total assets at the beginning of the year were $240,000, and the total assets at the end of the year were $280,000. The asset turnover ratio is (round answer to 2 decimal places)

During the current year, merchandise is sold for $237,500 cash and $625,000 on account. The cost of the goods sold is $422,300. What is the amount of the gross profit?

Prepare a multiple-step income statement for Fernandez Co. for the year ended December 31.

The inventory system employing accounting records that continuously disclose the amount of inventory is called

Match each of the following items (a-h) with the appropriate definition below. -Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system.

The following accounts and their current balances appear in the ledger of Cerelat Co. at the end of its fiscal year, June 30. Cerelat uses a periodic inventory system. ​ ​ ​ -Record the following transactions for Oyster Corp. using the general journal form provided below. Assume Oyster Corp. uses the gross method of recording sales discounts. Omit transaction descriptions from the entries. ​ ​ ​ ​

If merchandise sold on account is returned to the seller, the seller acknowledges the return by issuing a

The primary difference between the periodic and perpetual inventory systems is that a

Sellers and buyers are required to record trade discounts.

Which of the following accounts should be closed to Retained Earnings at the end of the fiscal year?

Using the perpetual inventory system, journalize the entries for the following selected transactions:

Sampson Co. sold merchandise to Batson Co. on account, $46,000, terms 2/15, net 45. The cost of the goods sold is $38,500. The Batson Co. paid the invoice within the discount period. Prepare the entries that both Sampson and Batson Companies would record for the above. Assume both Sampson and Batson use a perpetual inventory system.