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On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales. -Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is:


A) On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales. -Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is: A) B) C) D) E)
B) On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales. -Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is: A) B) C) D) E)
C) On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales. -Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is: A) B) C) D) E)
D) On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales. -Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is: A) B) C) D) E)
E) On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales. -Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is: A) B) C) D) E)

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A ________ is a price reduction granted by the seller to a buyer of defective or unacceptable merchandise.

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The ________ inventory system updates accounting records for each purchase and each sale of inventory.

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On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000. -Vander uses the periodic inventory system and the gross method of accounting for sales.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is:


A) On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000. -Vander uses the periodic inventory system and the gross method of accounting for sales.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is: A) B) C) D) E)
B) On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000. -Vander uses the periodic inventory system and the gross method of accounting for sales.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is: A) B) C) D) E)
C) On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000. -Vander uses the periodic inventory system and the gross method of accounting for sales.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is: A) B) C) D) E)
D) On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000. -Vander uses the periodic inventory system and the gross method of accounting for sales.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is: A) B) C) D) E)
E) On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000. -Vander uses the periodic inventory system and the gross method of accounting for sales.Jepson pays the invoice on September 18,and takes the appropriate discount.The journal entry that Vander makes on September 18 is: A) B) C) D) E)

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The acid-test ratio is also called the quick ratio.

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


A) $(217,000) .
B) $375,000.
C) $157,500.
D) $217,500.
E) $532,500.

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Define inventory for a merchandising company and describe how inventory is valued and reported.

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Merchandise inventory refers to products...

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A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise. -On July 8,it paid the full amount due.The amount of the cash paid on July 8 equals:


A) $200.
B) $1,564.
C) $1,568.
D) $1,600.
E) $1,800.

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A merchandiser:


A) Earns net income by buying and selling merchandise.
B) Receives fees only in exchange for services.
C) Earns profit from commissions only.
D) Earns profit from fares only.
E) Buys products from consumers.

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Which of the following statements regarding merchandise inventory is not true?


A) Merchandise inventory is reported on the balance sheet as a current asset.
B) Merchandise inventory refers to products a company owns and intends to sell.
C) Merchandise inventory may include the costs of freight-in and making them ready for sale.
D) Merchandise inventory appears on the balance sheet of a service company.
E) Purchasing merchandise inventory is part of the operating cycle for a business.

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Cost of goods sold:


A) Is another term for merchandise sales.
B) Is the term used for the expense of buying and preparing merchandise for sale.
C) Is another term for revenue.
D) Is also called gross margin.
E) Is a term only used by service firms.

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Each sales transaction for a seller that uses a perpetual inventory system involves recognizing both revenue and cost of merchandise sold.

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