Cost of merchandise sold equals beginning inventory

Accounting Homework 1-10

A company had sales of $375,000 and its gross profit was $157,500. Its cost of goods sold equals:

$(217,000).

$375,000.

$157,500.

$217,500.

$532,500.

A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals:

$200.

$1,564.

$1,568.

$1,600.

$1,800.

An account used in the periodic inventory system that is not used in the perpetual inventory system is

Merchandise Inventory

Sales

Sales Returns and Allowances

Accounts Payable

Purchases

Brig Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals:

$770,000.

$115,000.

$390,000.

$402,000.

$408,000.

Cost of goods sold:

Is another term for merchandise sales.

Is the term used for the cost of buying and preparing merchandise for sale.

Is another term for revenue.

Is also called gross margin.

Is a term only used by service firms.

Expenses of promoting sales by displaying and advertising merchandise, making sales, and delivering goods to customers are:

General and administrative expenses.

Cost of goods sold.

Selling expenses.

Purchasing expenses.

Nonoperating activities.

Herald Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. Herald Company's net sales equals:

• $5,200.
• $129,800.
• $133,000.
• $135,000.
• $140,200.

Merchandise inventory:

• Is a long-term asset.
• Is a current asset.
• Includes supplies.
• Is classified with investments on the balance sheet.
• Must be sold within one month.

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

• Choice A
• Choice B
• Choice C
• Choice D
• Choice E

On October 1, Courtland Company sold merchandise in the amount of $5,800 to Carter Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Courtland uses the periodic inventory system. Carter pays the invoice on October 8, and takes the appropriate discount. The journal entry that Courtland makes on October 8 is:

• Choice A
• Choice B
• Choice C
• Choice D
• Choice E

On October 1, Mutch Company sold merchandise in the amount of $5,800 to Carr Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Mutch uses the perpetual inventory system. On October 4, Carr returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Mutch must make on October 4 is:

• Choice A
• Choice B
• Choice C
• Choice D
• Choice E

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

• Choice A
• Choice B
• Choice C
• Choice D

The amount recorded for merchandise inventory includes all of the following except:
• Purchase discounts.
• Returns and allowances.
• Freight costs paid by the buyer.
• Freight costs paid by the seller.
• Trade discounts.

The credit terms 2/10, n/30 are interpreted as:
• 2% cash discount if the amount is paid within 10 days, or the balance due in 30 days.
• 10% cash discount if the amount is paid within 2 days, or the balance due in 30 days.
• 30% discount if paid within 2 days.
• 30% discount if paid within 10 days.
• 2% discount if paid within 30 days.

The current period's ending inventory is:
• The next period's beginning inventory.
• The current period's cost of goods sold.
• The prior period's beginning inventory.
• The current period's net purchases.
• The current period's beginning inventory.