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Exam 4: Reporting and Analyzing Merchandising Operations

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Question 111

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The gross margin ratio is defined as gross margin divided by net sales.

A) True
B) False

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Question 112

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FOB _________________ means the buyer accepts ownership when the goods depart the seller's place of business.The buyer is responsible for paying shipping costs and bears the risk of damage or loss when goods are in transit.

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shipping p...

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Question 113

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A company purchased $1,800 of merchandise on December 5.On December 7,it returned $200 worth of merchandise.On December 8,it paid the balance in full,taking a 2% discount.The amount of the cash paid on December 8 is:

The gross margin ratio reflects the relation between sales and cost of goods sold.

A company had sales of $350,000 and cost of goods sold of $200,000,which means gross profit is equal to $550,000.

Match the following definitions and terms:

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?

The acid-test ratio reflects the ___________ of a company.

In a periodic inventory system,cost of goods sold is recorded as each sale occurs.

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

Ceres Computer Sales uses the perpetual inventory system and had the following transactions during the month of December: Required: Prepare the general journal entries to record these transactions.

A company had net sales of $545,000 and cost of goods sold of $345,000,which means its gross margin is equal to $200,000.

Purchase discounts are the same as trade discounts.