Question 1

Gains and losses are recorded for increases and decreases in the market value of land.

Accepted Answer

A) True 
 B)False

Question 2

Wholesale companies sell goods primarily to other businesses.

Accepted Answer

A) True 
 B)False

Question 3

Selling costs are recognized as expenses in the period when goods are sold.

Accepted Answer

A) True 
 B)False

Question 4

Costs of selling inventory are product costs.

Accepted Answer

A) True 
 B)False

Question 5

Vargas Company sold a piece of land for $39,000 that had originally cost $32,500.How does this business event affect the company's financial statements?

Accepted Answer

A)   An increase in cash flows from investing activities by $39,000.
B)   No effect on operating income.
C)   An increase in net income by $6,500.
D)   All of these answer choices are correct.E) None of the above
F) All of the above

Question 6

[The following information applies to the questions displayed below.]
Sanchez Company engaged in the following transactions during Year 1:
1)  Started the business by issuing $42,000 of common stock for cash.
2)  The company paid cash to purchase $26,400 of inventory.
3)  The company sold inventory that cost $16,000 for $30,600 cash.
"4)  Operating expenses incurred and paid during the year, $14,000.
Sanchez Company engaged in the following transactions during Year 2:"
1)  The company paid cash to purchase $35,200 of inventory.
2)  The company sold inventory that cost $32,800 for $57,000 cash.
"3)  Operating expenses incurred and paid during the year, $18,000.
Note: Sanchez uses the perpetual inventory system."
-What is the amount of retained earnings that will be shown on the balance sheet at December 31,Year 2?

Accepted Answer

A)   $6,200
B)   $26,000
C)   $6,800
D)   $38,800E) None of the above
F) A) and B)

Exam 4: Accounting for Merchandising Businesses

Gains and losses are recorded for increases and decreases in the market value of land.

Correct Answer
verified

Wholesale companies sell goods primarily to other businesses.

Correct Answer
verified

Correct Answer
verified

Vargas Company sold a piece of land for $39,000 that had originally cost $32,500.How does this business event affect the company's financial statements?

Correct Answer
verified

Selling costs are recognized as expenses in the period when goods are sold.

Correct Answer
verified

Costs of selling inventory are product costs.

Correct Answer
verified

Exam 4: Accounting for Merchandising Businesses

Gains and losses are recorded for increases and decreases in the market value of land.

Correct AnswerverifiedShow Answer

Wholesale companies sell goods primarily to other businesses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Vargas Company sold a piece of land for $39,000 that had originally cost $32,500.How does this business event affect the company's financial statements?

Correct AnswerverifiedShow Answer

Selling costs are recognized as expenses in the period when goods are sold.

Correct AnswerverifiedShow Answer

Costs of selling inventory are product costs.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified