Q&A Hero

Q: A period's ___________________ becomes the next period's beginning inventory.

Q: The __________________ inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold.

Q: A ___________ inventory system updates the accounting record for inventory only at the end of a period.

Q: ________________________ refers to products that a company owns and intends to sell.

Q: A merchandising company's ___________ begins with the purchase of merchandise and ends with the collection of cash from merchandise sales.

Q: A ___________ is an intermediary that buys products from manufacturers and sells to retailers.

Q: A company had net sales of $741,800. Its cost of goods sold must have been _________ to yield a gross profit of $282,884.

Q: Maia's Bike Shop uses the periodic inventory system and had the following transactions during the month of May: May 3 Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The cost of the merchandise sold was $350. May 4 Sold merchandise to a customer for cash of $425. The cost of the merchandise was $250. May 6 Sold merchandise to a customer on credit for $1,300, term 2/10, n/30. The cost of the merchandise sold was $750. May 8 The customer from May 3 returned merchandise with a selling price of $100. The cost of merchandise returned was $55. May 15 The customer from May 6 paid the full amount due, less any appropriate discounts earned. May 31 The customer from May 3 paid the full amount due, less any appropriate discounts earned. Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

Q: Steve's Skateboards uses the periodic inventory system and had the following sales transactions during April: April 2 Sold merchandise to Happy Hobby Shop on credit for $4,800, terms 1/15, n/60. The items sold had a cost of $2,700. April 4 Happy Hobby Shop returned merchandise that had a selling price of $200. The cost of the merchandise returned was $110. April 13 Happy Hobby Shop paid for the merchandise sold on Aril 2, taking any appropriate discount earned Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Q: Neutron uses a periodic inventory system. Prepare general journal entries to record the following transactions for Neutron: June 10 Neutron purchased merchandise on credit from Proton for $9,000, terms 2/10, n/30. FOB destination. Transportation costs of $350 were paid by Proton. 12 Neutron returned $600 of merchandise from the June 10 purchase. 19 Neutron paid Proton for the June 10 purchase.

Q: From the adjusted trial balance for Worker Products, prepare the necessary closing entries. WORKER PRODUCTS COMPANY Adjusted Trial Balance December 31 Debit Credit Cash $ 9,400 Accounts receivable 25,000 Merchandise inventory 36,000 Office supplies 900 Store equipment 75,000 Accumulated depreciation store equipment $ 22,000 Office equipment 60,000 Accumulated depreciation office equipment 15,000 Accounts payable 42,000 Notes payable 10,000 Common stock 40,000 Retained earnings 70,700 Dividends 48,000 Sales 325,000 Sales discounts 6,000 Sales returns and allowances 16,500 Cost of goods sold 195,000 Sales salaries expense 32,500 Depreciation expense store equipment 11,000 Depreciation expense office equipment 7,500 Office supplies expense 1,300 Interest expense 600 Totals $524,700 $524,700

Q: From the adjusted trial balance for the Worker Products Company, prepare a multiple-step income statement in good form. WORKER PRODUCTS COMPANY Adjusted Trial Balance December 31 Debit Credit Cash $ 9,400 Accounts receivable 25,000 Merchandise inventory 36,000 Office supplies 900 Store equipment 75,000 Accumulated depreciation store equipment $ 22,000 Office equipment 60,000 Accumulated depreciation office equipment 15,000 Accounts payable 42,000 Notes payable 10,000 Common stock 40,000 Retained earnings 70,700 Dividends 48,000 Sales 325,000 Sales discounts 6,000 Sales returns and allowances 16,500 Cost of goods sold 195,000 Sales salaries expense 32,500 Depreciation expense store equipment 11,000 Depreciation expense office equipment 7,500 Office supplies expense 1,300 Interest expense 600 Totals $524,700 $524,700

Q: The year-end adjusted trial balance of ABC Supply for the current year is shown below: ABC SUPPLY Adjusted Trial Balance December 31 Debit Credit Cash $ 1,500 Office supplies 500 Merchandise inventory 11,000 Store equipment 18,000 Accum depr. store equipment $ 3,000 Accounts payable 6,000 Common stock 10,000 Retained earnings 40,000 Dividends 22,000 Sales 60,500 Cost of goods sold 48,000 Depreciation expense store equipment 1,000 Office supplies expense 1,500 Salaries expense 14,000 Rent expense 2,000 $119,500 $119,500 Prepare closing entries at December 31 for the current year.

Q: Following is the year-end adjusted trial balance for Yakima's Sporting Goods for the current year: YAKIMAS SPORTING GOODS Adjusted Trial Balance December 31 Dr Cr Cash $ 67,400 Accounts receivable 46,000 Merchandise inventory 50,000 Office supplies 800 Accounts payable 16,000 Salaries payable 850 Common stock 50,000 Retained earnings 75,530 Dividends 5,000 Sales 500,000 Sales returns and allowances 4,500 Sales discounts 4,250 Cost of goods sold 382,450 Sales salaries expense 44,000 Advertising expense 8,150 Office salaries expense 24,325 Office supplies expense 450 Interest expense 5,055 Totals $642,380 $642,380 Prepare the closing entries at December 31 for the current year.

Q: Maia's Bike Shop uses the perpetual inventory system and had the following transactions during the month of May: May 3 Sold merchandise to a customer on credit for $600, terms 2/10, n/30. The cost of the merchandise sold was $350. May 4 Sold merchandise to a customer for cash of $425. The cost of the merchandise was $250. May 6 Sold merchandise to a customer on credit for $1,300, terms 2/10, n/30. The cost of the merchandise sold was $750. May 8 The customer from May 3 returned merchandise with a selling price of $100. The cost of the merchandise returned was $55. May 15 The customer from May 6 paid the full amount due, less any appropriate discounts earned. May 31 The customer from May 3 paid the full amount due, less any appropriate discounts earned. Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

Q: Steve's Skateboards uses the perpetual inventory system and had the following sales transactions during April: April 2 Sold merchandise to Happy Hobby Shop on credit for $4,800, terms 1/15, n/60. The items sold had a cost of $2,700. April 4 Happy Hobby Shop returned merchandise that had a selling price of $200. The cost of the merchandise returned was $110. April 13 Happy Hobby Shop paid for the merchandise sold on April 2, taking any appropriate discount earned. Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Q: Roller Blade Company uses the perpetual inventory system and had the following transactions during October: October 6: Purchased $4,000 of inventory. The sellers credit terms are 2/10, n/30. October 8: Returned $200 worth of defective units and received full credit. October 15: Paid the amount due, less the returned items. Prepare journal entries to record each of the preceding transactions.

Q: A company that uses the perpetual inventory system purchased $8,500 worth of inventory on September 25. Terms of the purchase were 2/10, n/30. The invoice was paid in full on October 4. Prepare the journal entries to record these merchandise transactions.

Q: The following information is for Trico and its competitor Unico: Trico Unico Year 1 Year 2 Year 1 Year 2 Net sales $347,850 $365,418 $579,750 $664,395 Cost of sales 121,747 146,167 318,862 312,265 Required: A. Calculate the dollar amount of gross margin and the gross margin ratio to the nearest percent for each company for both years. B. Which company had the more favorable ratio for each year? C. Which company had the more favorable change in the gross margin ratio over this two-year period?

Q: A company reported the following information for the month of November: Sales $50,475 Sales discounts 235 Sales returns and allowances 2,840 Cost of goods sold 33,975 Required: Calculate this company's gross margin ratio.

Q: Calculate the gross margin ratio for each of the following separate cases A through D: A B C D Net sales $135,000 $623,500 $37,800 $259,600 Cost of goods sold 83,600 249,200 13,230 127,204

Q: A company reported the following year-end information: Cash $ 52,000 Short-term investments 12,000 Accounts receivable 54,000 Inventory 325,000 Prepaid expenses 17,500 Accounts payable 106,500 Other current payables 25,000 Required: a. Explain the purpose of the acid-test ratio. b. Calculate the acid-test ratio for this company. c. What does the acid-test ratio reveal about this company?

Q: . The following information refers to Annie's Attic and its competitors in the antiques business: Current Ratio Quick Ratio Annieu2019s Attic 2.0 0.95 Bartu2019s Basement 1.5 1.00 Chisolmu2019s Collectibles 1.8 1.20 Martinu2019s Marbles 1.9 0.80 Industry Average 2.0 1.00 Required: Comment on the relative liquidity positions of these companies.

Q: Fill in the blanks (a) through (g) for the Hendricks Company for each of the income statements for 2012, 2013, and 2014. HENDRICKS COMPANY Income Statements For the Years Ended December 31 2012 2013 2014 Sales $7,500 $10,000 (f) Cost of goods sold Merchandise inventory (beginning) (a) 375 750 Total cost of merchandise purchases 2,400 3,625 4,875 Merchandise inventory (ending) (b) 750 625 Cost of goods sold 2,770 (d) 5,000 Gross profit (c) 6,750 5,200 Operating expenses 3,750 3,750 (g) Net income $ 980 (e) $ 2,500

Q: Harriet's Toy Shop had net sales of $852,000. The gross profit was $230,000. Calculate Harriet's cost of goods sold.

Q: Takita Company had net sales of $500,000 and cost of goods sold of $350,000. Calculate Takita's gross profit.

Q: A company has net sales of $1,909,000, sales commissions in the amount of $250,000, net income of $866,400, and gross profit ratio of 60%. What is the amount of cost of goods sold?

Q: A company has sales of $2,530,000, sales discounts of $200,000, sales returns and allowances of $323,000, shipping charges of $115,000, sales commissions of $234,000, net income of $863,500, and cost of goods sold of $1,012,000. What is the gross profit/margin ratio?

Q: A company has sales of $2,530,000, sales discounts of $200,000, sales returns and allowances of $323,000, shipping charges of $115,000, sales commissions of $234,000, net income of $863,500, and cost of goods sold of $1,012,000. What is the gross profit/margin for the period?

Q: Scuba Company had net income on the current years income statement in the amount of $800,000, other expense in the amount of $400,000, and a gross profit ratio of 58%. What was the amount of net sales on the income statement?

Q: Why does Chelsea Eubanks company, Faithful Fish, use a perpetual inventory system?

Q: What are the differences between the periodic and the perpetual inventory systems?

Q: How do closing entries for a merchandising company that uses the perpetual inventory system differ from the closing entries for a service company?

Q: Describe the recording process (including costs) for sales of merchandise inventory using a perpetual inventory system.

Q: Describe the recording process (including costs) for purchasing merchandise inventory using a perpetual inventory system.

Q: What does FOB stand for? Differentiate between FOB shipping point (or FOB factory) and FOB destination?

Q: What is gross margin ratio? How is it used as an indicator of profitability?

Q: What is the acid-test ratio? How does it measure a company's liquidity?

Q: Explain the cost flows and operating activities of a merchandising company.

Q: What is the difference between the periodic and perpetual inventory systems?

Q: List the steps of the operating cycle for a merchandiser with credit sales.

Q: Identify and explain the key components of income for a merchandising company.

Q: Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term. 1. The description of the amounts and timing of payments from a buyer to a seller. Perpetual inventory system 2. Net sales less cost of goods sold. Periodic inventory system 3. The amount of time allowed before full payment is due. Discount period 4. An accounting method that continually updates accounting records for merchandise transactions. Debit memorandum 5. A notification that the sender has debited the recipient's account kept by the sender. Selling expenses 6. A cash discount granted to customers for paying within the discount period. Credit memorandum 7. The expenses of promoting sales, by displaying and advertising merchandise, making sales, and delivering goods to customers. Sales discount 8. An accounting method that updates the accounting records for merchandise transactions only at the end of a period. Gross profit 9. The time period in which a cash discount is available and a reduced payment can be made by the buyer. Credit terms 10. A notification that the sender has credited the recipient's account kept by the sender. Credit period

Q: Vital Company had net income on this periods income statement in the amount of $624,240, expenses other than cost of goods sold in the amount of $381,480, and a gross profit ratio of 58%. What was the amount of net sales on the income statement? A. $1,836,000 B. $ 1,076,276 C. $1,734,000 D. Cant be determined with the information given. E. $1,005,720

Q: Total Company has current liabilities in the amount of $1,250,000 and an acid test ratio of 3 and a current ratio of 7. What amount of quick assets does Total Company have on the balance sheet? A. $8,750,000 B. $ 416,667 C. $3,750,000 D. $1,250,000 E. $2,500,000

Q: A company has the following accounts. What is the acid test ratio? Cash $10,000 Wages payable $2,000 Accounts receivable 20,500 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 18,352 Miscellaneous expense 280 Common stock 54,490 A. 4.50% B. 2.30% C. 1.75% D. 4.00% E. 1.50%

Q: A company has the following accounts. What is the acid test ratio? Cash $6,754 Dividends $2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained earnings 13,847 A. 3.58% B. 3.17% C. 1.80% D. 4.00% E. 2.68%

Q: A company has net sales of $1,500,000, sales commissions in the amount of $194,000, net income of $366,400, and the gross profit ratio of 60%. What amount is listed as gross profit on the income statement for the period? A. $ 563,760 B. $ 600,000 C. $ 783,600 D. $ 900,000 E. $1,119,840

Q: A company has net sales of $1,832,000, sales commissions of $194,000, net income of $366,400, and the gross profit ratio of 60%. What is the amount of cost of goods sold? A. $ 538,800 B. $ 732,800 C. $ 655,200 D. $ 879,360 E. $1,099,200

Q: A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000, net income of $263,500, and cost of goods sold of $420,000. What is the gross profit/margin ratio? A. 72.0% B. 53.7% C. 67.1% D. 81.7% E. 17.6%

Q: A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000, net income of $263,500, and cost of goods sold of $420,000. What is the gross profit/margin for the period? A. $ 806,000 B. $1,031,000 C. $1,182,000 D. $1,080,000 E. $ 855,000

Q: A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000,net income totaled $263,500, and cost of goods sold of $420,000. What is the net sales amount for the period? A. $1,500,000 B. $1,275,000 C. $1,725,000 D. $1,521,000 E. $1,479,000

Q: A company purchased merchandise inventory at a cost of $8,500 with credit terms 2/10, net 60. If the company borrows $8,330 to pay for the purchase on the last day of the discount period and pays the loan plus interest in the amount of $8,466.93 on the last day of the credit period, what is the net savings? A. $170.00 B. $-33.07 C. $136.93 D. $33.07 E. There is no savings to the company

Q: On July 22, a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10, net 60. If the company borrows money at 12% to pay for the purchase on the last day of the discount period and pays the loan off on the last day of the credit period, what would be the net savings for the company? A. $99.50 B. $-20.43 C. $84.57 D. $20.43 E. $-84.57

Q: On July 22, a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10, net 30. If the company pays for the purchase on August 7, what would be the appropriate journal entry? A. Merchandise Inventory 5,250 Accounts Payable 5,250 B. Accounts Payable 5,250 Merchandise Inventory 5,250 C. Accounts Payable 5,250 Cash 5,250 D. Accounts Payable 5,145 Cash 5,145 E. Accounts Payable 5,250 Merchandise Inventory 105 Cash 5,145

Q: On July 22, a company that uses the perpetual inventory system purchased merchandise inventory at a cost of $5,250 with credit terms 2/10, net 30. If the company pays for the purchase on August 1, what would be the appropriate journal entry? A. Merchandise Inventory 5,250 Accounts Payable 5,250 B. Accounts Payable 5,250 Merchandise Inventory 5,250 C. Purchase Discount 5,145 Accounts Payable 5,145 D. Accounts Payable 5,145 Cash 5,145 E. Accounts Payable 5,250 Merchandise Inventory 105 Cash 5,145

Q: A company that uses the perpetual inventory system purchased merchandise inventory at a cost of $4,300 with credit terms 3/15, net 45. If the company elects to pay within the discount period, what would be the appropriate journal entry to record the payment? A. Merchandise Inventory 4,300 Accounts Payable 4,300 B. Accounts Payable 4,300 Merchandise Inventory 4,300 C. Purchase Discount 4,171 Accounts Payable 4,171 D. Accounts Payable 4,171 Cash 4,171 E. Accounts Payable 4,300 Merchandise Inventory 129 Cash 4,171

Q: On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the periodic inventory system. On October 4, Alberts 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 Robertson must make on October 4 is: A. Sales Returns and Allowances 500 Accounts Receivable 500 Merchandise Inventory 350 Cost of Goods Sold 350 B. Sales Returns and Allowances 500 Accounts Receivable 500 C. Accounts Receivable 500 Sales Returns and Allowances 500 D. Accounts Receivable 500 Sales Returns and Allowances 500 Cost of Goods Sold 350 Merchandise Inventory 350 E. Sales Returns and Allowances 350 Accounts Receivable 350

Q: On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the periodic inventory system. Alberts pays the invoice on October 8 and takes the appropriate discount. The journal entry that Robertson makes on October 8 is: A. Cash 5,800 Accounts Receivable 5,800 B. Cash 4,000 Accounts Receivable 4,000 C. Cash 3,920 Sales Discounts 80 Accounts Receivable 4,000 D. Cash 5,684 Accounts Receivable 5,684 E. Cash 5,684 Sales Discounts 116 Accounts Receivable 5,800

Q: On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the periodic inventory system. The journal entry or entries that Robertson will make on October 1 is: A. Sales 5,800 Accounts Receivable 5,800 B. Sales 5,800 Accounts Receivable 5,800 Cost of Goods Sold 4,000 Merchandise Inventory 4,000 C. Accounts Receivable 5,800 Sales 5,800 D. Accounts Receivable 5,800 Sales 5,800 Cost of Goods Sold 4,000 Merchandise Inventory 4,000 E. Accounts Receivable 4,000 Sales 4,000

Q: When preparing an unadjusted trial balance using a periodic inventory system, the amount shown for merchandise inventory is: A. The ending inventory amount. B. The beginning inventory amount. C. Equal to the cost of goods sold. D. Equal to the cost of goods purchased. E. Equal to the gross profit.

Q: An account used in the periodic inventory system that is not used in the perpetual inventory system is: A. Merchandise Inventory B. Sales C. Sales Returns and Allowances D. Accounts Payable E. Purchases

Q: Multiple-step income statements: A. Are required by the FASB. B. Contain more detail than a simple listing of revenues and expenses. C. Are required for the perpetual inventory system. D. List cost of goods sold as an operating expense. E. Can only be used in perpetual inventory systems.

Q: A company had cash sales of $49,527, credit sales of $38,540, sales returns and allowances of $7,100, and sales discounts of $4,375. The company's net sales for this period equal: A. $80,967 B. $83,692 C. $88,067 D. $76,592 E. $99,542

Q: Alpha Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Alpha's net sales for this period equal: A. $94,275 B. $172,550 C. $174,250 D. $176,025 E. $177,725

Q: Expenses that support the overall operations of a business and include the expenses relating to accounting, human resource management, and financial management are called: A. Cost of goods sold. B. Selling expenses. C. Purchasing expenses. D. General and administrative expenses. E. Nonoperating activities.

Q: An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a: A. Balanced income statement. B. Single-step income statement. C. Multiple-step income statement. D. Combined income statement. E. Simplified income statement.

Q: Which of the following statements is true regarding the closing process of a merchandiser? A. Sales Discounts, Sales Returns and Allowances, and Cost of Goods sold should all be credited during closing. B. Sales Discounts, Sales Returns and Allowances, and Cost of Goods sold should all be debited during closing. C. Sales Discounts and Sales Returns and Allowances should be debited; Cost of Goods Sold should be credited during closing. D. Sales Discounts and Sales Returns and Allowances should be credited; Cost of Goods Sold should be debited during closing. E. Sales Discounts and Sales Returns and Allowances are not closed. Cost of Goods Sold should be credited during closing.

Q: Which of the following accounts would be closed with a debit? A. Sales Discounts B. Sales Returns and Allowances C. Cost of Goods Sold D. Operating Expenses E. Sales

Q: On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. On October 4, Alberts 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 Robertson must make on October 4 is: A. Sales Returns and Allowances 500 Accounts Receivable 500 Merchandise Inventory 350 Cost of Goods Sold 350 B. Sales Returns and Allowances 500 Accounts Receivable 500 C. Accounts Receivable 500 Sales Returns and Allowances 500 D. Accounts Receivable 500 Sales Returns and Allowances 500 Cost of Goods Sold 350 Merchandise Inventory 350 E. Sales Returns and Allowances 350 Accounts Receivable 350

Q: On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. Alberts pays the invoice on October 8 and takes the appropriate discount. The journal entry that Robertson makes on October 8 is: A. Cash 5,800 Accounts Receivable 5,800 B. Cash 4,000 Accounts Receivable 4,000 C. Cash 3,920 Sales Discounts 80 Accounts Receivable 4,000 D. Cash 5,684 Accounts receivable 5,684 E. Cash 5,684 Sales Discounts 116 Accounts Receivable 5,800

Q: On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. The journal entry or entries that Robertson will make on October 1 is: A. Sales 5,800 Accounts Receivable 5,800 B. Sales 5,800 Accounts Receivable 5,800 Cost of Goods Sold 4,000 Merchandise Inventory 4,000 C. Accounts Receivable 5,800 Sales 5,800 D. Accounts Receivable 5,800 Sales 5,800 Cost of Goods Sold 4,000 Merchandise Inventory 4,000 E. Accounts receivable 4,000 Sales 4,000

Q: Herald Company had sales of $135,000, sales discounts of $2,000 and sales returns of $3,200. Herald Company's net sales equals: A. $5,200 B. $129,800 C. $133,000 D. $135,000 E. $140,200

Q: Sales less sales discounts less sales returns and allowances equals: A. Net purchases. B. Cost of goods sold. C. Net sales. D. Gross profit. E. Net income.

Q: A debit to Sales Returns and Allowances and a credit to Accounts Receivable: A. Reflects an increase in amount due from a customer. B. Recognizes that a customer returned merchandise and/or received an allowance. C. Requires a debit memorandum to recognize the customer's return. D. Is recorded when a customer takes a discount. E. Reflects an increase in net sales.

Q: Sales returns: A. Refer to merchandise that customers return to the seller after the sale. B. Refer to reductions in the selling price of merchandise sold to customers. C. Represent cash discounts. D. Represent trade discounts. E. Are not recorded under the perpetual inventory system until the end of each accounting period.

Q: A company purchased $6,000 of merchandise on credit with terms 4/15, n/30. How much will be debited to Accounts Payable if the company pays $800 cash on this account within 10 days? A. $833.33 B. $800 C. Nothing will debited to Accounts Payable; the account should be credited in this situation. D. $5,760 E. $5,333.33

Q: A company purchased $1,500 of merchandise on credit with terms 3/15, n/30. How much will be debited to Accounts Payable if the company pays $485 cash on this account within 10 days? A. $485 B. $500 C. Nothing will be debited to Accounts Payable; the account should be credited in this situation. D. $470.45 E. $1,455

Q: A company purchased $4,000 worth of merchandise. Transportation costs were an additional $350. The company later returned $275 worth of merchandise and paid the invoice within the 2% cash discount period. The total amount paid for this merchandise is: A. $3,725.00 B. $3,925.00 C. $3,995.00 D. $4,000.50 E. $4,075.00

Q: A company purchased $7,500 worth of merchandise. Transportation costs were an additional $80. The company later returned $900 worth of merchandise and paid the invoice within the 3% cash discount period. The total amount paid for this merchandise is: A. $6,479.60 B. $6,482.00 C. $7,275.00 D. $7,355.00 E. $6,680.00