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Exam 4: Accounting for Merchandising Businesses

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Question 31

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Merchandise inventory shrinkage will increase Merchandise Inventory.

A) True
B) False

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Question 32

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The document issued by the seller that informs the buyer of the details of sales returns is called a debit memorandum.

A) True
B) False

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Question 33

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The merchandise inventory account is found on the balance sheet.

Investing activities include

The difference between sales and cost of merchandise sold for a merchandising business is

A sales invoice included the following information: merchandise price,$6,000;terms 2/10,n/eom.Assuming that a credit for merchandise returned of $600 is granted prior to payment,and that the invoice is paid within the discount period,what is the amount of cash received by the seller?

Which of the following is NOT an administrative expense?

On the income statement in the single-step form,the total of all expenses is deducted from the total of all revenues.

It is usual for the credit period to begin with the date the merchandise is received by the buyer.

Inventory NOT sold at the end of the period is reported as

Generally,the revenue account for a merchandising business is entitled

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

What is subtracted from sales to arrive at net sales?

In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.

Gold Co.sold merchandise to Bronze Co.on account,$25,000,terms 2/15,net 45.The cost of the merchandise sold is $18,500.Gold Co.issued a credit memorandum for $2,500 for merchandise returned that originally cost $1,900.Bronze Co.paid the invoice within the discount period.What is amount of net sales from the transactions?

State the section(s)of the statement of cash flows prepared by the indirect method (operating activities,investing activities,financing activities,or not reported)and the amount that would be reported for each of the following transactions:

Which of the following would NOT affect the operating activities section of the statement of cash flows,using the indirect method?

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

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

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