Acc Guide

Toys R Fun purchased $4,000 of merchandise and paid immediately. To record this transaction, Toys R Fun's accountant would debit the (Merchandise Inventory/Accounts Payable/Cash) account and credit the (Cash/Merchandise Inventory/Accounts Payable) account.

Merchandise Inventory Cash

Which statement below correctly explains what merchandise inventory is?

Merchandise inventory is an asset reported on the balance sheet and contains the cost of products purchased for sale.

Determine which of the following statements below regarding a merchandiser are correct

Merchandise is acquired for resale to customers.

Which of the statements below are correct regarding cost of goods sold?

Cost of goods sold is the expense of buying and preparing merchandise.

Sales is a(n) ______ account.

revenue

A merchandiser has four closing journal entries at the end of an accounting cycle. Select the correct entries below.

Close expense accounts. Close the dividends account. Close revenue accounts. Close the income summary account

Explain how to determine gross profit on an income statement by selecting the correct statement below.

Cost of goods sold is subtracted from net sales.

If the seller is responsible for the shipping costs of merchandise sold, the shipping terms will be specified as:

FOB destination

A single-step income statement can be identified by which of the following formats?

It shows only one total for all expenses.

Merchandise inventory can be described

an account appearing on a balance sheet of a merchandiser. products that a company owns and intends to sell. an account increased with a debit. an asset account.

Review the following credit terms and identify the one that states that the buyer will receive a 3% discount if the payment is made within 15 days. Otherwise, full payment is expected within 45 days of the invoice date.

3/15,n/45

What is a purchase return?

A purchase return refers to merchandise a buyer acquires, but then returns to the seller.

Determine which statements below are correct regarding merchandise available for sale during a period.

Beginning inventory + Net purchases = Merchandise available for sale Ending inventory + Cost of goods sold = Merchandise available for sale

X-Mart purchased $300 of merchandise on credit. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used.

Debit Merchandise Inventory $300; credit Accounts Payable $300.

Which of the following equations correctly identify the cost flow of a merchandising company

Net purchases plus beginning inventory equals merchandise available for sale

The components of a merchandiser's multi-step income statement are shown below. In which order would they appear on the statement?

Net sales Cost Of Goods Sold Gross Profit Expenses Net Income

Jan's Jams makes a credit sale for $300 with terms of 2/10,n/30. The cost of the merchandise is $200. The required journal entry to record the sale and the cost of the sale is:

debit Accounts Receivable $300; credit Sales $300; debit Cost of Goods Sold $200; and credit Merchandise Inventory $200

Explain what the credit terms of 2/10,n/30 mean.

-The full payment is due within a 30-day credit period .-The buyer can deduct 2% of the invoice amount if payment is made within 10 days of the invoice date.

Merchandise inventory can be described as:

-an account appearing on a balance sheet of a merchandiser. -an asset account. -an account increased with a debit. -products that a company owns and intends to sell.

X-Mart purchased $300 of merchandise and paid immediately. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used.

Debit Merchandise Inventory $300; credit Cash $300.

The buyer and seller of merchandise must agree on who is responsible for paying freight terms. Show your understanding of freight terms by selecting all of the correct statements below.

Terms FOB shipping point means the buyer accepts ownership when the goods depart the seller's place of business. When the shipping costs are the responsibility of the buyer, then the Merchandise Inventory account is debited for the freight charges. Terms FOB destination means that the seller is responsible for shipping costs. Revenue for the sale will be recorded after the goods reach their destination, if the goods are shipped FOB destination.

Identify the statements below that are correct regarding the closing entries for a merchandiser using the perpetual inventory system.

The Dividends account is closed to Retained Earnings Sales is closed as a revenue account. Cost of goods sold is closed with the expense accounts. Sales Returns and Allowances is closed with the expense accounts. Sales Discounts is closed with the expense accounts.

Complete the following statement. Merchandise inventory that is still available for sale is considered a(n) ________ (asset/expense/revenue) and is reported on the ____________ (balance sheet/income statement) and merchandise that is sold during the period is considered a(n) _______ (asset/expense/liability) and reported on the ____________ (balance sheet/income statement).

asset -> balance sheet -> expense -> income statement

Complete the following statement. Merchandise inventory that is still available for sale is considered a(n) (asset/expense/revenue) and is reported on the (balance sheet/income statement) and merchandise that is sold during the period is considered a(n) (asset/expense/liability) and reported on the (balance sheet/income statement).

assets balance sheet expense income statement

Show your understanding of a merchandiser by completing the following statement. Merchandisers earn net income by (buying/manufacturing)Maufacturing Maufacturing , Incorrect Unavailable and (selling/purchasing)Selling

buying selling

Show your understanding of what merchandise is by completing the following sentence. Merchandise consists of that a company acquires to resell to . Use one word for each blank.

products, goods, items, inventory, or assets customers, consumers, or buyers

Sales is a(n) expenseBlank 1Blank 1 expense , Incorrect Unavailable (expense/revenue/asset) account and is reported on the incomeBlank 2Blank 2 income , Correct Unavailable (income/balance)statementBlank 3Blank 3 statement , Correct Unavailable (statement/sheet).

revenue income statement