FABM2 Reviewer/mock test

Which of the following best describes a merchandising business?

• Engaged in providing services to customers

• Involved in the buying and selling of merchandise or goods

• Primarily focused on manufacturing products

• Specialized in offering consulting solutions

What is the primary source of goods for a merchandising business?

• Direct purchase from customers

• Production within the company

• Acquisition from wholesalers or manufacturers

• Donation from charitable organizations

Which type of merchandiser typically purchases goods in bulk directly from manufacturers?

• Retailer

• Consumer

• Wholesaler

• Distributor

What is the primary difference between a wholesaler and a retailer?

• Wholesalers sell products to end users, while retailers buy in bulk from manufacturers.

• Retailers buy in bulk directly from manufacturers, while wholesalers sell products to end users.

• Wholesalers buy in bulk directly from manufacturers, while retailers sell products to end users.

• Retailers sell products to other businesses, while wholesalers buy directly from consumers.

They sell products to end users

• Retailers

• Wholesaler

• Consumer

• Distributor

What system is typically used by small businesses where updates to inventory accounts are made periodically?

• Continuous system

• Perpetual system

• Periodic system

• Incremental system

In a periodic inventory system, when merchandise is purchased, where is the cost recorded?

• Inventory account

• Purchases account

• Sales account

• Revenue account

Which account is used to record sales in a periodic inventory system?

• Inventory account

• Purchases account

• Sales account

• Cost of Goods Sold account

In a periodic inventory system, when is the determination of Cost of Goods Sold (COGS) typically made?

• At the time of sale

• Continuously throughout the accounting period

• At the beginning of the accounting period

• At the end of the accounting period

What is the purpose of adjusting entries in a periodic inventory system?

• To record daily sales transactions

• To determine the beginning inventory

• To calculate net purchases

• To reflect the actual Cost of Goods Sold and adjust inventory at the end of the period