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WorksheetsACCOUNTING FOR BASIC MERCHANDISING TRANSACTIONS
Total questions: 20
Worksheet time: 40mins
The primary difference between a periodic and perpetual inventory system is that a
periodic system keeps a record showing the inventory on hand at all times
periodic system determines the inventory on hand only at the end of the accounting
period
periodic system provides an easy means to determine inventory shrinkage
periodic system records the cost of the sale on the date the sale is made
Gross profit is equal to:
sales plus sales returns and allowances less sales discounts less cost of merchandise sold
sales plus (sales discounts and sales returns and allowances) plus cost of merchandise
sold
sales less (sales discounts and sales returns and allowances) less cost of merchandise sold
sales plus sales discounts less sales returns and allowances less cost of merchandise sold
Using the following information, what is the amount of cost of merchandise sold?
31,220
25,870
23,270
25,780
Using the following information, what is the amount of gross profit?
31,970
30,470
25,780
56,250
Using the following information, what is the amount of net sales?
25,780
57,000
57,750
56,250
Using the following information, what is the amount of merchandise available for sale?
33,580
33,850
25,780
30,470
Silver Co. sold merchandise to Bronze Co. on account, $23,000, terms 2/15, net 45. The cost
of the merchandise sold is $18,500. Silver Co. issued a credit memorandum for $2,500 for
merchandise returned that originally cost $1,900. The Bronze Co. paid the invoice within the
discount period. What is amount of net sales from the above transactions?
$20,090
$20,040
$20,500
$23,900
Using a perpetual inventory system, the entry to record the sale of merchandise on account
includes a
debit to Sales
debit to Merchandise Inventory
credit to Merchandise Inventory
credit to Accounts Receivable
Using a perpetual inventory system, the entry to record the return from a customer of
merchandise sold on account includes a
credit to Sales Returns and Allowances
debit to Merchandise Inventory
credit to Merchandise Inventory
debit to Cost of Merchandise Sold
A retailer purchases merchandise with a catalog list price of $10,000. The retailer receives a
25% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to
the Merchandise Inventory account?
$10,000
$7,500
$9,800
$7,350
A sales invoice included the following information: merchandise price, $4,000;
transportation, $300; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for
merchandise returned of $600 is granted prior to payment, that the transportation is prepaid
by the seller, and that the invoice is paid within the discount period, what is the amount of
cash received by the seller?
$3,366
$3,666
$3,400
$3,950
If the buyer is to pay the transportation costs of delivering merchandise, delivery terms are
stated as
FOB shipping point
FOB destination
FOB n/30
FOB buyer
If the seller is to pay the transportation costs of delivering merchandise, the delivery terms
are stated as
FOB shipping point
FOB destination
FOB n/30
FOB seller
Merchandise with an invoice price of $4,000 is purchased on June 2 subject to terms of 2/10,
n/30, FOB destination. Transportation costs paid by the seller totaled $150. What is the cost
of the merchandise if paid on June 12, assuming the discount is taken?
$4,150
$4,070
$3,920
$4,067
When goods are shipped FOB destination and the seller pays the transportation charges, the
buyer
journalizes a reduction for the cost of the merchandise.
journalizes a reimbursement to the seller.
does not take a discount.
makes no journal entry for the transportation.
Black Company sold Red Company merchandise on account FOB shipping point, 2/10, net
30, for $10,000. Black prepaid the $200 shipping charge. Which of the following entries
does Black make to record this sale?
Accounts Receivable-Red, debit $10,000; Sales, credit $10,000
Accounts Receivable-Red, debit $10,000; Sales, credit $10,000, and
Accounts Receivable-Red, debit $200; Cash, credit $200
Accounts Receivable-Red, debit $10,400; Sales, credit $10,400
Accounts Receivable-Red, debit $10,000; Sales, credit $10,000, and
Transportation Out, debit $200; Cash, credit $200
Orange Co. sold Red Co. merchandise on account FOB shipping point, 2/10, net 30, for
$10,000. Orange Co. prepaid the $200 shipping charge. Using the perpetual inventory
system, which of the following entries will Red Co. make if Red Co. pays within the
discount period?
Accounts Payable-Orange Co., debit $10,000; Transportation In, credit $200; Cash, credit
$9,800
Accounts Payable-Orange Co., debit $10,200; Merchandise Inventory, credit $200; Cash,
credit $10,000
Accounts Payable-Orange Co., debit $10,000; Transportation In, debit $200; Cash, credit
$10,200
Accounts Payable-Orange Co., debit $10,200; Merchandise Inventory, debit $200; Cash,
credit $10,400
Discounts taken by a buyer because of early payment are recorded on the seller’s accounting
records as
Purchases discount
Sales discount
Trade discount
Early payment discount
Robles Co. sells $1,000 of inventory to Salas Co.for cash. Robles paid $650 for the
merchandise. Under a perpetual inventory system, the following journal entry(ies) would be
recorded.
Cash 1,000 Dr, Merchandise Inventory 650 Cr
Cash 1,000 Dr, Sales 1,000 Cr, Cost of Merchandise Sold 650 Dr, Merchandise Inventory
650 Cr.
Cash 1,000 Dr, Sales 1,000 Cr
Accounts Receivable 1,000 Dr, Sales 1,000 Cr, Cost of Merchandise Sold 650 Dr,
Merchandise Inventory 650 Cr.
Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is
dated on September 15 with terms of 1/15, net 45. What is the amount of the discount and
up to what date must the invoice be paid in order for the buyer to take advantage of the
discount?
$160, September 30
$160, September 25
$80, September 30
$80, September 25
