Term
| Two categories of expenses in merchandising companies are |
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Definition
| cost of goods sold and operating expenses. |
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Term
| Sales revenue less cost of goods sold is called |
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Definition
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Term
| A company using a perpetual inventory system that returns goods previously purchased on credit would |
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Definition
| debit Accounts Payable and credit Inventory |
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Term
| Freight costs incurred by a seller on merchandise sold to customers will cause an increase |
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Definition
| in operating expenses for the seller. |
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Term
Stan’s Market recorded the following events involving a recent purchase of inventory:
Received goods for $90,000, terms 2/10, n/30.
Returned $1,800 of the shipment for credit.
Paid $450 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company’s inventory |
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Definition
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Term
| Sales revenues are usually considered earned when |
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Definition
| goods have been transferred from the seller to the buyer |
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Term
| Under the perpetual inventory system, in addition to making the entry to record a sale, a company would |
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Definition
| debit Cost of Goods sold and credit Inventory. |
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Term
| The Sales Returns and Allowances account is classified as a(n) |
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Definition
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Term
| The collection of an $900 account within the 2 percent discount period will result in a |
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Definition
| debit to Sales Discounts for $18. |
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Term
| Piper Company sells merchandise on account for $1,500 to Morton Company with credit terms of 2/10, n/30. Morton Company returns $500 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Piper Company make upon receipt of the check? |
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Definition
Cash 980
Sales Returns and Allowances 500
Sales Discounts 20
Accounts Receivable 1,500 |
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Term
| The collection of a $600 account beyond the 2 percent discount period will result in a |
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Definition
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Term
| Interest expense would be classified on a multiple-step income statement under the heading |
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Definition
| Other expenses and losses |
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Term
| The sales section of an income statement for a retailer would not include |
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Definition
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Term
Financial information is presented below:
Operating expenses $36,000
Sales revenue 150,000
Cost of goods sold 105,000
The gross profit rate would be |
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Definition
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Term
Financial information is presented below:
Operating expenses $28,000
Sales returns and allowances 7,000
Sales discounts 3,000
Sales revenue 150,000
Cost of goods sold 91,000
The profit margin ratio would be |
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Definition
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Term
Financial information is presented below:
Operating expenses $35,000
Sales returns and allowances 12,000
Sales discounts 3,000
Sales revenue 140,000
Cost of goods sold 85,000
Gross profit would be |
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Definition
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Term
| What is an advantage of using the multiple-step income statement? |
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Definition
| It highlights the components of net income. |
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Term
Sampson Company's accounting records show the following for the year ending on December 31, 2014.
Purchase Discounts $5,600
Freight-in 7,800
Purchases 350,010
Beginning Inventory 23,500
Ending Inventory 28,800
Purchase Returns and Allowances 6,400
Using the periodic system, the cost of goods sold is |
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Definition
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Term
| United Services and Supplies reports net income of $60,000 and cost of goods sold of $360,000. US&S’s gross profit rate was 40%, net sales were |
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Definition
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