Quiz 5

Question 1

A merchandiser earns profit by buying and selling merchandise

Answer 1

true

Question 2

a service company earns profit by buying and selling merchandise

Answer 2

false

Question 3

A wholesaler is a company that buys products from manufactures and sells them to consumers

Answer 3

false

Question 4

a retailer is a middleman that buys products from manufacturers and sells them to wholesaler

Answer 4

false

Question 5

gross profit is also called gross

Answer 5

true

Question 6

Y-mart had sales of $350,000 its cost of goods sold was $200,00 its gross profit is $550,000

Answer 6

false

Question 7

Y-mart has a net sales of $645,000 its cost of goods was $445,000 its gross margin was $200,000

Answer 7

true

Question 8

Cost of goods sold is reported on both the income statement and the balance sheet

Answer 8

false

Question 9

a perpetual inventory system gives a continuous record of the amount of inventory on hand

Answer 9

true

Question 10

The terms 2/10, n/30 means that the seller offers the purchaser a 2% cash discount if the amount is paid in full within 10 days Otherwise the full amount is due in 30 days

Answer 10

true

Question 11

for each sales transaction of a seller using a perpetual inventory system it recognizes revenue and cost of goods sold

Answer 11

true

Question 12

A debit to sales Returns and Allowances and a credit to Accounts receivable means that a customer may have returned the merchandise

Answer 12

true

Question 13

Sales of $350,000 and net sales of $323,000 may reflect sales discounts od $27,000

Answer 13

true

Question 14

Transportation-in increases cost of goods purchased

Answer 14

true

Question 15

Merchandising sales and costs reported on the income statement usually differ from cash receipts and payments for the period

Answer 15

true

Question 16

a classified multiple-step income statement is a format that shows intermediate totals between sales and profit and detailed calculations of net sales and cost of goods sold

Answer 16

true

Question 17

businesses normally get a full credit for the goods and services tax (GST) and/or Harmonized sales tax (HST) that they have paid

Answer 17

true

Question 18

retailer

Answer 18

buys products from manufacturers and wholesalers and sell to consumers

Question 19

merchandise inventory is(are)

Answer 19

products a company owns for resale to customers

Question 20

2/10, n/30 is interpreted as

Answer 20

2% cash discount id the whole amount is paid within 10 days, the balance is due in 30 days

Question 21

sales returns and allowances

Answer 21

are usually recorded in separate contra-revenus accounts

Question 22

MicroAge sells cellphones at a selling price that includes a 65% markup on a cost. If a cellphone cost MicroAge $300 its selling price is

Answer 22

$495.00

Question 23

You work at a sporting goods store. You are considering adding baseball gloves and bats to your inventory What would be the selling price of baseball bats with a mark-up % of 85% (cost is $12) and the baseball gloves with a target gross margin of 60% (cost is $20)

Answer 23

selling price (bats) = $22.20 selling price (gloves) = $50

Question 24

The agreed cost of an item to be purchased by a business on credit is $4,000 the applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST) When this transaction is recorded, what amount will be credited to accounts payable

Answer 24

$4480

Question 25

A business sold some inventory that has cost $5,000 before taxes The sale is subject to 5% goods and services tex (GST) and 7% provincial sales tax (PST) the business uses a perpetual inventory account as a result of this sale

Answer 25

$5,000