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Roller Blade Company uses the perpetual inventory system and had the following transactions during October: Roller Blade Company uses the perpetual inventory system and had the following transactions during October: Prepare journal entries to record each of the preceding transactions. Prepare journal entries to record each of the preceding transactions.

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The year-end adjusted trial balance of ABC Supply for the current year is shown below: The year-end adjusted trial balance of ABC Supply for the current year is shown below: Prepare closing entries at December 31 for the current year. Prepare closing entries at December 31 for the current year.

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Closing en...

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A company had cash sales of $49,527,credit sales of $38,540,sales returns and allowances of $7,100,and sales discounts of $4,375.The company's net sales for this period equal:


A) $80,967.
B) $83,692.
C) $88,067.
D) $76,592.
E) $99,542.

F) B) and D)
G) B) and C)

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________________________ refers to products that a company owns and intends to sell.

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Merchandis...

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Identify and explain the key components of income for a merchandising company.

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The basic components of income begin wit...

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A merchandising company:


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) A) and E)
G) All of the above

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Inventory shrinkage can be computed by comparing the ___________ of inventory with recorded quantities and amounts.

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physical c...

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A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

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A company purchased merchandise inventory at a cost of $8,500 with credit terms 2/10,net 60.If the company borrows $8,330 to pay for the purchase on the last day of the discount period and pays the loan plus interest in the amount of $8,466.93 on the last day of the credit period,what is the net savings?


A) $170.00
B) $(33.07)
C) $136.93
D) $33.07
E) There is no savings to the company

F) A) and B)
G) C) and D)

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Sales less sales discounts less sales returns and allowances equals:


A) Net purchases.
B) Cost of goods sold.
C) Net sales.
D) Gross profit.
E) Net income.

F) A) and B)
G) A) and C)

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____________________ refer to merchandise that customers return to the seller after a sale.

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Sagan Company uses the perpetual inventory method.On October 6,Sagan sold merchandise to Parley Co.for $20,000 under credit terms of 2/10,n/60.On October 9,Parley returned $5,000 of that merchandise.On October 15,Sagan received balance due from Parley Co.How would Sagan record this transaction?


A) Debit Cash for $20,000 and credit Accounts Receivable for $20,000.
B) Debit Cash for $15,000 and credit Accounts Receivable for $15,000.
C) Debit Cash for $14,700,debit Sales Discounts for $300,and credit Accounts Receivable for $15,000.
D) Debit Cash for $14,700,debit Sales Discounts for $300,and credit Sales for $15,000.
E) Debit Cash for $15,000,credit Sales Discounts for $300,and credit Accounts Receivable for $14,700

F) C) and D)
G) None of the above

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The acid-test ratio is also called the quick ratio.

A) True
B) False

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A company purchased $6,000 of merchandise on credit with terms 4/15,n/30.How much will be debited to Accounts Payable if the company pays $800 cash on this account within 10 days?


A) $833.33
B) $800.00
C) Nothing will debited to Accounts Payable; the account should be credited in this situation.
D) $5,760.00
E) $5,333.33

F) A) and B)
G) All of the above

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List the steps of the operating cycle for a merchandiser with credit sales.

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The steps are: (1) cash purcha...

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A perpetual inventory system requires updating of the inventory account only at the beginning of an accounting period.

A) True
B) False

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Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May: Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May: Prepare the required journal entries that Maia's Bike Shop must make to record these transactions. Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

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When preparing an unadjusted trial balance using a periodic inventory system,the amount shown for merchandise inventory is:


A) The ending inventory amount.
B) The beginning inventory amount.
C) Equal to the cost of goods sold.
D) Equal to the cost of goods purchased.
E) Equal to the gross profit.

F) C) and D)
G) A) and E)

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On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.The journal entry or entries that Robertson will make on October 1 is:


A) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.The journal entry or entries that Robertson will make on October 1 is: A) B) C) D) E)
B) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.The journal entry or entries that Robertson will make on October 1 is: A) B) C) D) E)
C) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.The journal entry or entries that Robertson will make on October 1 is: A) B) C) D) E)
D) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.The journal entry or entries that Robertson will make on October 1 is: A) B) C) D) E)
E) On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the perpetual inventory system.The journal entry or entries that Robertson will make on October 1 is: A) B) C) D) E)

F) A) and E)
G) None of the above

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A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry to record the payment?


A) A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry to record the payment? A) B) C) D) E)
B) A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry to record the payment? A) B) C) D) E)
C) A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry to record the payment? A) B) C) D) E)
D) A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry to record the payment? A) B) C) D) E)
E) A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15,net 45.If the company elects to pay within the discount period,what would be the appropriate journal entry to record the payment? A) B) C) D) E)

F) C) and D)
G) B) and C)

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