Question 1

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Accepted Answer

A)  $209,000 and $191,470
B)  $278,000 and $179,500
C)  $278,000 and $98,500
D)  $179,500 and $98,500
E)  $645,500 and $179,500F) A) and E)
G) B) and D)

Question 2

Purchase discounts are the same as trade discounts.

Accepted Answer

A) True 
 B)False

Question 3

Expenses to promote sales by displaying and advertising merchandise,make sales,and deliver goods to customers are known as:

Accepted Answer

A)  General and administrative expenses.
B)  Cost of goods sold.
C)  Selling expenses.
D)  Purchasing expenses.
E)  Non-operating activities.F) A) and E)
G) All of the above

Question 4

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

Accepted Answer

A) True 
 B)False

Question 5

A merchandiser:

Accepted Answer

A)  Earns net income by buying and selling merchandise.
B)  Receives fees only in exchange for services.
C)  Earns profit from commissions only.
D)  Earns profit from fares only.
E)  Buys products from consumers.F) All of the above
G) B) and D)

Question 6

Delivery expense is reported as part of general and administrative expense in the seller's income statement.

Accepted Answer

A) True 
 B)False

Question 7

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Accepted Answer

A) True 
 B)False

Question 8

Under a periodic inventory system,purchases,purchases returns and allowances,purchase discounts,and transportation in transactions are recorded in the Merchandise Inventory account.

Accepted Answer

A) True 
 B)False

Question 9

Garza Company had sales of $135,000,sales discounts of $2,000,and sales returns of $3,200.Garza Company's net sales equals:

Accepted Answer

A)  $5,200.
B)  $129,800.
C)  $133,000.
D)  $135,000.
E)  $140,200.F) A) and E)
G) B) and E)

Exam 4: Reporting and Analyzing Merchandising Operations

Purchase discounts are the same as trade discounts.

Correct Answer
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Under a periodic inventory system,purchases,purchases returns and allowances,purchase discounts,and transportation in transactions are recorded in the Merchandise Inventory account.

Correct Answer
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A merchandiser:

Correct Answer
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Garza Company had sales of $135,000,sales discounts of $2,000,and sales returns of $3,200.Garza Company's net sales equals:

Correct Answer
verified

Expenses to promote sales by displaying and advertising merchandise,make sales,and deliver goods to customers are known as:

Correct Answer
verified

Delivery expense is reported as part of general and administrative expense in the seller's income statement.

Correct Answer
verified

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Correct Answer
verified

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Correct Answer
verified

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

Correct Answer
verified

Exam 4: Reporting and Analyzing Merchandising Operations

Purchase discounts are the same as trade discounts.

Correct AnswerverifiedShow Answer

Under a periodic inventory system,purchases,purchases returns and allowances,purchase discounts,and transportation in transactions are recorded in the Merchandise Inventory account.

Correct AnswerverifiedShow Answer

A merchandiser:

Correct AnswerverifiedShow Answer

Garza Company had sales of $135,000,sales discounts of $2,000,and sales returns of $3,200.Garza Company's net sales equals:

Correct AnswerverifiedShow Answer

Expenses to promote sales by displaying and advertising merchandise,make sales,and deliver goods to customers are known as:

Correct AnswerverifiedShow Answer

Delivery expense is reported as part of general and administrative expense in the seller's income statement.

Correct AnswerverifiedShow Answer

A company has net sales of $825,000 and cost of goods sold of $547,000.Its net income is $98,500.The company's gross margin and operating expenses,respectively,are:

Correct AnswerverifiedShow Answer

Sellers always offer a discount to buyers for prompt payment toward purchases made on credit.

Correct AnswerverifiedShow Answer

A journal entry with a debit to cash of $980,a debit to Sales Discounts of $20,and a credit to Accounts Receivable of $1,000 means that a customer has taken a 10% cash discount for early payment.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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