Accounting II Chapter 4 Theory - Wild

Last step in operating cycle for a merchandising business.

• inventory for sale

• credit sales

• cash collection

• cash pourchase of merchandise

Who pays transportation costs in FOB shipping scenario?

• buyer

• seller

1/10 n/30. How much is the discount and how may days is the discount available?

• 10% discount - 10 days

• 1% discount - 30 days

• no discount available

• 1% discount - 10 days

Compute gross margin ratio. Net sales $1000 and cost of goods sold $350.

• 35%

• 65%

• $650

• $1350

Sales is $200,000. Sales Discounts $10,000 and Sales Returns and Allowances $5000. Cost of Goods Sold is $80,000. How much is Net Sales?

• $200,000

• $120,000

• $190,000

• $185,000

Sales is $200,000. Sales Discounts $10,000 and Sales Returns and Allowances $5000. Cost of Goods Sold is $80,000. How much is the gross profit?

• $105,000

• $295,000

• 52.5%

• 56.8%

First step in operating cycle for a merchandising business.

• credit sales

• cash purchase of merchandise

• cash collection

• inventory for sale

Who pays transportation costs in FOB destination scenario?

• buyer

• seller

Compute the net income. Sales $100,000. Cost of Goods Sold $30,000. Expenses $20,000.

• $70,000

• $80,000

• $50,000

• $150,000

Sold merchandise on account for $10,000. The cost of the merchandise was $4,000. Which one is the proper entry for the sale of merchandise.

• Debit - Merchandise Inventory $10,000 and Credit Accounts Receivable $10,000

• Debit - Merchandise Inventory $10,000 and Credit Accounts Payable $10,000

• Debit A/R $10,000 and Credit Sales $10,000

• Debit A/R $10,000 and Credit Sales $10,000 and Debit Cost of Goods Sold $4,000 and Credit Merchandise Inventory $4,000