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5 - 12
Test Bank for Accounting Principles, Eleventh Edition
5 - 13
Accounting for Merchandising Operations
CHAPTER 5
ACCOUNTING FOR MERCHANDISING OPERATIONS
Summary of Questions by LEARNING Objectives and Bloom’s Taxonomy
Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT
True-False Statements
1.
1
C
10.
3
C
19.
5
K
28.
5
K
sg37.
2
K
2.
1
C
11.
3
C
20.
5
K
29.
5
K
sg38.
3
K
3.
1
K
12.
3
K
21.
5
C
a30.
6
K
sg39.
3
K
4.
1
K
13.
4
C
22.
5
C
a31.
7
K
sg40.
4
C
5.
1
K
14.
4
K
23.
5
C
a32.
7
K
sg41.
5
K
6.
2
K
15.
4
K
24.
5
K
a33.
7
K
sg42.
5
K
7.
2
K
16.
5
K
25.
5
K
a34.
7
K
8.
3
C
17.
5
K
26.
5
AP
sg35.
1
K
9.
3
C
18.
5
K
27.
5
K
sg36.
1
K
Multiple Choice Questions
43.
1
K
73.
2
AP
103.
3
K
133.
5
AP
a163.
7
AP
44.
1
K
74.
3
AP
104.
3
C
134.
5
AP
a164.
7
AP
45.
1
C
75.
3
AP
105.
3
C
135.
5
AP
sg165.
1
AP
46.
1
K
76.
3
AP
106.
3
K
136.
5
AP
sg166.
2
K
47.
1
K
77.
3
C
107.
3
K
137.
5
AP
sg167.
2
K
48.
1
C
78.
3
C
108.
4
C
138.
5
AP
st168.
2
K
49.
1
K
79.
3
AP
109.
4
C
139.
5
AP
sg169.
3
K
50.
1
K
80.
3
AP
110.
4
K
140.
5
AP
st170.
4
K
51.
1
C
81.
3
C
111.
1
C
141.
5
AP
sg171.
6
AP
52.
1
K
82.
3
C
112.
4
C
142.
5
AP
st172.
5
K
53.
1
C
83.
3
C
113.
5
AP
143.
5
AP
sg173.
6
K
54.
1
C
84.
3
K
114.
5
K
144.
5
AP
a,st174.
7
K
55.
1
C
85.
3
K
115.
5
C
145.
5
AP
175.
8
K
56.
1
K
86.
3
C
116.
5
C
a146.
6
K
176.
8
K
57.
1
C
87.
3
C
117.
5
C
a147.
6
K
177.
8
K
58.
2
K
88.
3
K
118.
5
AP
a148.
7
AP
178.
8
K
59.
2
K
89.
3
K
119.
5
K
149.
7
AP
179.
8
K
60.
2
C
90.
3
C
120.
5
C
150.
7
AP
180.
8
K
61.
2
K
91.
3
K
121.
5
K
151.
7
C
181
8
K
62.
2
C
92.
3
AP
122.
5
K
a152.
7
K
182
8
K
63.
2
C
93.
3
C
123.
5
K
a153.
7
K
183.
8
K
64.
2
C
94.
3
C
124.
5
AP
a154.
7
K
184.
8
K
65.
2
AP
95.
3
C
125.
5
AP
a155.
7
AP
185.
8
K
66.
2
AP
96.
3
C
126.
5
K
a156.
7
AP
186.
8
K
67.
2
C
97.
3
C
127.
5
C
a157.
7
K
187.
8
K
68.
2
K
98.
3
C
128.
5
K
a158.
7
C
188.
8
K
69.
2
AP
99.
3
AP
129.
5
K
a159.
7
C
189.
8
K
70.
2
AP
100.
3
AP
130.
5
AP
a160.
7
K
71.
2
K
101.
3
AP
131.
5
AP
a161.
7
K
72.
2
AP
102.
3
K
132.
5
AP
a162.
7
C
sg This question also appears in the Study Guide.
st This question also appears in a self-test at the student companion website.
a This question covers a topic in an appendix to the chapter.
Summary of Questions by LEARNING Objectives and Bloom’s Taxonomy
Brief Exercises
190.
1
AP
193.
3
AP
196.
5
AP
199.
7
AP
191.
2
AP
194.
3
AP
197.
5
AP
200.
7
AP
192.
2,3
AP
195.
4
AP
198.
7
AP
a201.
7
AP
Exercises
202.
1
C
207.
2,3
AN
212.
4
AP
217.
5
AP
a222.
7
AP
203.
2,3
AP
208.
2
AP
213.
4
AP
218.
5
C
a223.
7
AP
204.
2,3
AP
209.
3
AP
214.
5
AN
219.
5
AP
a224.
7
AP
205.
2
E
210.
3
AP
215.
5
AP
220.
5
AP
a221.
7
AP
206.
2,3
AP
211.
4
AP
216.
5
AP
a221.
6
AP
a226.
7
AP
Completion Statements
227.
1
K
229.
1
K
231.
2
K
233.
3
K
235.
5
K
228.
1
K
230.
2
K
232.
3
K
234.
3
K
236.
5
K
Matching Statements
237.
1
K
Short-Answer Essay
238.
3
K
240.
3
K
242.
1
K
244.
1
K
239.
1
K
241.
5
K
243.
5
K
245.
1
K
SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Learning Objective 1
1.
TF
35.
TF
46.
MC
51.
MC
56.
MC
202.
Ex
239.
SA
2.
TF
36.
TF
47.
MC
52.
MC
57.
MC
227.
C
242.
SA
3.
TF
43.
MC
48.
MC
53.
MC
111.
MC
228.
C
244.
SA
4.
TF
44.
MC
49.
MC
54.
MC
165.
MC
229.
C
245.
SA
5.
F
45.
MC
50.
MC
55.
MC
190.
BE
237.
MA
Learning Objective 2
6.
TF
60.
MC
65.
MC
70.
MC
157.
MC
204.
Ex
230.
C
7.
TF
61.
MC
66.
MC
71.
MC
158.
MC
205.
Ex
231.
C
37.
TF
62.
MC
67.
MC
72.
MC
203.
Ex
206.
Ex
58.
MC
63.
MC
68.
MC
73.
MC
166.
BE
207.
Ex
59.
MC
64.
MC
69.
MC
156.
MC
167.
BE
208.
Ex
Learning Objective 3
8.
TF
75.
MC
83.
MC
91.
MC
99.
MC
107.
MC
209.
Ex
9.
TF
76.
MC
84.
MC
92.
MC
100.
MC
169.
MC
210.
Ex
10.
TF
77.
MC
85.
MC
93.
MC
101.
MC
192.
BE
232.
C
11.
TF
78.
MC
86.
MC
94.
MC
102.
MC
193.
BE
233.
C
12.
TF
79.
MC
87.
MC
95.
MC
103.
MC
194.
BE
234.
C
38.
TF
80.
MC
88.
MC
96.
MC
104.
MC
203.
Ex
240.
SA
39.
TF
81.
MC
89.
MC
97.
MC
105.
MC
204.
Ex
74.
MC
82.
MC
90.
MC
98.
MC
106.
MC
206.
Ex
SUMMARY OF Learning OBJECTIVES BY QUESTION TYPE
Learning Objective 4
13.
TF
15.
TF
108.
MC
110.
MC
170.
MC
211.
Ex
213.
Ex
14.
TF
40.
TF
109.
MC
112.
MC
195.
BE
212.
Ex
Learning Objective 5
16.
TF
26.
TF
117.
MC
127.
MC
137.
MC
172.
MC
235.
C
17.
TF
27.
TF
118.
MC
128.
MC
138.
MC
173.
MC
236.
C
18.
TF
28.
TF
119.
MC
129.
MC
139.
MC
196.
BE
241.
SA
19.
TF
29.
TF
120.
MC
130.
MC
140.
MC
197.
BE
243.
SA
20.
TF
41.
TF
121.
MC
131.
MC
141.
MC
215.
Ex
21.
TF
42.
TF
122.
MC
132.
MC
142.
MC
216.
Ex
22.
TF
113.
MC
123.
MC
133.
MC
143.
MC
217.
Ex
23.
TF
114.
MC
124.
MC
134.
MC
144.
MC
218.
Ex
24.
TF
115.
MC
125.
MC
135.
MC
145.
MC
219.
Ex
25.
TF
116.
MC
126.
MC
136.
MC
171.
MC
220.
Ex
Learning Objective a6
a34.
TF
175.
MC
178.
MC
181.
MC
184.
MC
187.
MC
a225.
Ex
a146.
MC
176.
MC
179.
MC
182.
MC
185.
MC
188.
MC
a147.
MC
177.
MC
180.
MC
183.
MC
186.
MC
189.
MC
Learning Objective a7
a30.
TF
a149.
MC
a154.
MC
a159.
MC
a164.
MC
a201.
BE
a225.
Ex
a31.
TF
a150.
MC
a155.
MC
a160.
MC
a174.
MC
a221.
Ex
a226.
Ex
a32.
TF
a151.
MC
a156.
MC
a161.
MC
a198.
BE
a222.
Ex
a33.
TF
a152.
MC
a157.
MC
a162.
MC
a199.
BE
a223.
Ex
a148.
MC
a153.
MC
a158.
MC
a163.
MC
a200.
BE
a224.
Ex
Learning Objective 8
175.
MC
177.
MC
179.
MC
181.
MC
183.
MC
185.
MC
176.
MC
178.
MC
180.
MC
182.
MC
184.
MC
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise SA = Short-Answer
MA = Matching
CHAPTER LEARNING OBJECTIVES
1. Identify the differences between service and merchandising companies. Because of inventory, a merchandising company has sales revenue, cost of goods sold, and gross profit. To account for inventory, a merchandising company must choose between a perpetual and a periodic inventory system.
2. Explain the recording of purchases under a perpetual inventory system. The company debits the Inventory account for all purchases of merchandise, and freight-in, and credits it for purchase discounts and purchase returns and allowances.
3. Explain the recording of sales revenues under a perpetual inventory system. When a merchandising company sells inventory, it debits Accounts Receivable (or Cash) and credits Sales Revenue for the selling price of the merchandise. At the same time, it debits Cost of Goods Sold and credits Inventory for the cost of the inventory items sold. Sales returns and allowances and sales discounts are debited and are contra revenue accounts.
4. Explain the steps in the accounting cycle for a merchandising company. Each of the required steps in the accounting cycle for a service company applies to a merchandising company. A worksheet is again an optional step. Under a perpetual inventory system, the company must adjust the Inventory account to agree with the physical count.
5. Distinguish between a multiple-step and a single-step income statement. A multiple-step income statement shows numerous steps in determining net income, including nonoperating activities sections. A single-step income statement classifies all data under two categories, revenues or expenses, and determines net income in one step.
a6. Prepare a worksheet for a merchandising company. The steps in preparing a worksheet for a merchandising company are the same as for a service company. The unique accounts for a merchandiser are Inventory, Sales Revenue, Sales Returns and Allowances, Sales Discounts, and Cost of Goods Sold.
a7. Explain the recording of purchases and sales of inventory under a periodic inventory system. In recording purchases under a periodic system, companies must make entries for (a) cash and credit purchases, (b) purchase returns and allowances, (c) purchase discounts, and (d) freight costs. In recording sales, companies must make entries for (a) cash and credit sales, (b) sales returns and allowances, and (c) sales discounts.
TRUE-FALSE STATEMENTS
1. Retailers and wholesalers are both considered merchandisers.
Ans: T, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics
2. The steps in the accounting cycle are different for a merchandising company than for a service company.
Ans: F, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting
3. Sales minus operating expenses equals gross profit.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting
4. Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA
5. A periodic inventory system requires a detailed inventory record of inventory items.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA
6. Freight terms of FOB Destination means that the seller pays the freight costs.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics
7. Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.
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