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On March 4, Micro Sales makes $4,850 in sales on bank credit cards which charge a 2.5% service charge and deposits the funds into Micro Sales' bank accounts at the end of the business day. Journalize the sales and recognition of expense.

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The sales are deb...

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Match each of the following terms (a-h) with the correct definition below. -Inventory system that updates the inventory account for every purchase and sale transaction.


A) Credit terms
B) FOB destination
C) FOB shipping point
D) Periodic inventory system
E) Perpetual inventory system
F) Inventory shrinkage
G) Single-step income statement
H) Multiple-step income statement

I) A) and B)
J) None of the above

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A company using the periodic inventory system has inventory costing $210 on hand at the beginning of a period. During the period, merchandise costing $635 is purchased. At year-end, inventory costing $160 is on hand. The cost of goods sold for the year is


A) $795
B) $685
C) $265
D) $635

E) A) and B)
F) B) and D)

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The following accounts and their current balances appear in the ledger of Cerelat Co. at the end of its fiscal year, June 30. Cerelat uses a periodic inventory system. ​ The following accounts and their current balances appear in the ledger of Cerelat Co. at the end of its fiscal year, June 30. Cerelat uses a periodic inventory system. ​ ​ ​ -A physical inventory at the end of June was $882,000. Estimated Returns Inventory is expected to increase to $16,500. Prepare a multiple-step income statement for Cerelat Co. showing how cost of goods sold was calculated for the year ended June 30. ​ ​ -A physical inventory at the end of June was $882,000. Estimated Returns Inventory is expected to increase to $16,500. Prepare a multiple-step income statement for Cerelat Co. showing how cost of goods sold was calculated for the year ended June 30.

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If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are


A) n/30
B) FOB shipping point
C) FOB destination
D) consigned

E) A) and B)
F) A) and D)

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Details of a purchase invoice and related credit memo are summarized as follows: Details of a purchase invoice and related credit memo are summarized as follows: ​ Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period. Determine the following: (a) Amount of the cash discount allowed. (b) Amount to be paid by the purchaser if the discount is taken. (c) Cost of the merchandise to the purchaser if the discount is not taken. ​ Assume that the credit memo was received prior to payment and that the invoice is paid within the discount period. Determine the following: (a) Amount of the cash discount allowed. (b) Amount to be paid by the purchaser if the discount is taken. (c) Cost of the merchandise to the purchaser if the discount is not taken.

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Using the following information for a periodic inventory system, what is the amount of net income? Using the following information for a periodic inventory system, what is the amount of net income? A) $29,510 B) $29,960 C) $28,310 D) $29,350


A) $29,510
B) $29,960
C) $28,310
D) $29,350

E) All of the above
F) A) and B)

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The following entry was recorded in the books of Brighty Company. The following entry was recorded in the books of Brighty Company. ​ What is the impact of this entry on the accounting equation? A) an increase in Assets and an increase in Equity B) an increase in Assets and an increase in Liabilities C) a decrease in Assets and a decrease in Liabilities D) a decrease in Assets and a decrease in Equity ​ What is the impact of this entry on the accounting equation?


A) an increase in Assets and an increase in Equity
B) an increase in Assets and an increase in Liabilities
C) a decrease in Assets and a decrease in Liabilities
D) a decrease in Assets and a decrease in Equity

E) B) and C)
F) A) and D)

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Prepare a statement of stockholders' equity for Fernandez Company. Additional common stock of $100,000 was issued during the year.

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A retailer purchases merchandise with a catalog list price of $30,000. The retailer receives a 15% trade discount and has credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?


A) $30,000
B) $24,900
C) $29,400
D) $24,990

E) B) and C)
F) A) and B)

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Customer Refunds Payable is an account used to record merchandise returns from customers.

A) True
B) False

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The following accounts and their current balances appear in the ledger of Cerelat Co. at the end of its fiscal year, June 30. Cerelat uses a periodic inventory system. ​ The following accounts and their current balances appear in the ledger of Cerelat Co. at the end of its fiscal year, June 30. Cerelat uses a periodic inventory system. ​ ​ ​ -A physical inventory at the end of June was $882,000. Estimated Returns Inventory is expected to increase to $16,500. What is the amount of cost of goods sold for Cerelat Co. for the year? Use the list of accounts and their current balances given above for Cerelat Co. A) $886,000 B) $832,500 C) $822,000 D) $825,000 ​ ​ -A physical inventory at the end of June was $882,000. Estimated Returns Inventory is expected to increase to $16,500. What is the amount of cost of goods sold for Cerelat Co. for the year? Use the list of accounts and their current balances given above for Cerelat Co.


A) $886,000
B) $832,500
C) $822,000
D) $825,000

E) A) and B)
F) A) and C)

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The following entry was recorded in the books of Brighty Company. The following entry was recorded in the books of Brighty Company. What is the impact of this entry on the accounting equation? ​ A) an increase in Assets and an increase in Equity B) an increase in Assets and an increase in Liabilities C) a decrease in Assets and a decrease in Liabilities What is the impact of this entry on the accounting equation? ​


A) an increase in Assets and an increase in Equity
B) an increase in Assets and an increase in Liabilities
C) a decrease in Assets and a decrease in Liabilities

D) None of the above
E) All of the above

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Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a


A) debit to Bank Credit Card Sales, debit to Credit Card Expense, and a credit to Sales
B) debit to Cash and a credit to Sales
C) debit to Cash, credit to Credit Card Expense, and a credit to Sales
D) debit to Sales, debit to Credit Card Expense, and a credit to Cash

E) A) and C)
F) A) and B)

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When a buyer returns merchandise purchased for cash, the buyer will record the transaction as a


A) debit to Inventory; a credit to Cash
B) debit to Cash; a credit to Inventory
C) debit to Cash; a credit to Sales
D) debit to Sales; a credit to Accounts Payable

E) C) and D)
F) All of the above

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The adjusting entry to account for normal inventory shrinkage involves


A) a debit to Inventory and a credit to Cost of Goods Sold
B) a debit to Cost of Goods Sold and a credit to Inventory
C) a debit to Inventory Shrinkage and a credit to Inventory
D) a debit to Inventory and a credit to Inventory Shrinkage

E) A) and B)
F) A) and C)

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The following expenses were incurred by a retail business during the year. Classify whether they should be reported on the income statement as a (1) selling expense, (2) administrative expense, or (3) other.

Premises
Commissions expense paid to sales staff
Rent expense on office building
Interest expense on notes payable
Depreciation expense on office equipment
Advertising expense
Salary expense of sales manager
Salary expense of office staff
Office supplies expense
Responses
selling expense
other
administrative expense

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Commissions expense paid to sales staff
Rent expense on office building
Interest expense on notes payable
Depreciation expense on office equipment
Advertising expense
Salary expense of sales manager
Salary expense of office staff
Office supplies expense

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be


A)
The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be A) B) Jan. 1 Office Supplies \quad 1,500 Cash \quad 1,500 C) \begin{array}{l} \text { Jan. } 1 \text { Purchases }&1,500 \\ \text { Accounts Payable }&1,500 \end{array} D) Jan. 1 Cash \quad 1,500 Accounts Receivable \quad 1,500
B)
Jan. 1 Office Supplies 1,500 \quad 1,500
Cash 1,500 \quad 1,500
C)
 Jan. 1 Purchases 1,500 Accounts Payable 1,500\begin{array}{l}\text { Jan. } 1 \text { Purchases }&1,500 \\\text { Accounts Payable }&1,500\end{array}
D)
Jan. 1 Cash 1,500 \quad 1,500
Accounts Receivable 1,500 \quad 1,500

E) A) and D)
F) A) and C)

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Record the following transactions for Sparky's Pet Shop using the general journal form provided below. Assume Sparky's uses a perpetual inventory system. Omit transaction descriptions from entries: Record the following transactions for Sparky's Pet Shop using the general journal form provided below. Assume Sparky's uses a perpetual inventory system. Omit transaction descriptions from entries: ​ ​ Record the following transactions for Sparky's Pet Shop using the general journal form provided below. Assume Sparky's uses a perpetual inventory system. Omit transaction descriptions from entries: ​

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The asset turnover ratio is the relationship between:


A) sales and average total assets
B) average sales and average total assets
C) average sales and total assets
D) sales and total assets

E) None of the above
F) All of the above

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