Quiz 5 Flashcards
A merchandiser earns profit by buying and selling merchandise
true
a service company earns profit by buying and selling merchandise
false
A wholesaler is a company that buys products from manufactures and sells them to consumers
false
a retailer is a middleman that buys products from manufacturers and sells them to wholesaler
false
gross profit is also called gross
true
Y-mart had sales of $350,000 its cost of goods sold was $200,00 its gross profit is $550,000
false
Y-mart has a net sales of $645,000 its cost of goods was $445,000 its gross margin was $200,000
true
Cost of goods sold is reported on both the income statement and the balance sheet
false
a perpetual inventory system gives a continuous record of the amount of inventory on hand
true
The terms 2/10, n/30 means that the seller offers the purchaser a 2% cash discount if the amount is paid in full within 10 days Otherwise the full amount is due in 30 days
true
for each sales transaction of a seller using a perpetual inventory system it recognizes revenue and cost of goods sold
true
A debit to sales Returns and Allowances and a credit to Accounts receivable means that a customer may have returned the merchandise
true
Sales of $350,000 and net sales of $323,000 may reflect sales discounts od $27,000
true
Transportation-in increases cost of goods purchased
true
Merchandising sales and costs reported on the income statement usually differ from cash receipts and payments for the period
true
a classified multiple-step income statement is a format that shows intermediate totals between sales and profit and detailed calculations of net sales and cost of goods sold
true
businesses normally get a full credit for the goods and services tax (GST) and/or Harmonized sales tax (HST) that they have paid
true
retailer
buys products from manufacturers and wholesalers and sell to consumers
merchandise inventory is(are)
products a company owns for resale to customers
2/10, n/30 is interpreted as
2% cash discount id the whole amount is paid within 10 days, the balance is due in 30 days
sales returns and allowances
are usually recorded in separate contra-revenus accounts
MicroAge sells cellphones at a selling price that includes a 65% markup on a cost. If a cellphone cost MicroAge $300 its selling price is
$495.00
You work at a sporting goods store. You are considering adding baseball gloves and bats to your inventory What would be the selling price of baseball bats with a mark-up % of 85% (cost is $12) and the baseball gloves with a target gross margin of 60% (cost is $20)
selling price (bats) = $22.20 selling price (gloves) = $50
The agreed cost of an item to be purchased by a business on credit is $4,000 the applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST) When this transaction is recorded, what amount will be credited to accounts payable
$4480
A business sold some inventory that has cost $5,000 before taxes The sale is subject to 5% goods and services tex (GST) and 7% provincial sales tax (PST) the business uses a perpetual inventory account as a result of this sale
$5,000
