- LOL Music Store uses the perpetual inventory system to account for its merchandise. On November 17, it purchased $1,000 of merchandise with terms of 2/5,n/60. If payment is made on December 21, demonstrate the required journal entry to record the payment by selecting all of the correct actions below. (Check all that apply.)
- If the seller is responsible for the shipping costs of merchandise sold, the shipping terms will be specified as:
- Show your understanding of a merchandiser by completing the following statement. Merchandisers earn net income by (buying/manufacturing) (1. ?) and (selling/purchasing) (2. ?) merchandise.
- Determine which statements below are correct regarding merchandise available for sale during a period.(Check all that apply.)
- The discount period is the time (1. ?) (before/between) the invoice date and a specified date on which the payment amount owed can be (2. ?) (increased/reduced) because of early payment.
- On Dec. 7, Toys R Fun purchased $1,000 of merchandise with terms of 2/10,n/30. If payment is made on December 30, demonstrate the required journal entry for Toys R Fun to record the payment under the perpetual inventory system.
- A cash discount can be summarized as a discount given to (1. ?) (buyers/creditors/sellers) to encourage them to pay (2. ?) (earlier/later/less/more).
- X-Mart purchased $300 of merchandise and paid immediately. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used.
- On June 5, X-Mart purchased $400 of merchandise with terms of 2/10,n/30. If payment is made on June 11, calculate the purchase discount that may be taken by X-Mart.
- Complete the following statement. Merchandise inventory that is still available for sale is considered a(n) ________ (asset/expense/revenue) and is reported on the ____________ (balance sheet/income statement) and merchandise that is sold during the period is considered a(n) _______ (asset/expense/liability) and reported on the ____________ (balance sheet/income statement).
- Review the following credit terms and identify the one that states that the buyer will receive a 3% discount if the payment is made within 15 days. Otherwise, full payment is expected within 45 days of the invoice date.
- Credit terms of n/15 were printed on an invoice. Explain what this means.
- merchandise that is sold during the period reported on the
- merchandise that is sold during the period is considered a(n)se that is sold during the period is considered a(n)
- Toys R Fun purchased $4,000 of merchandise and paid immediately. To record this transaction, Toys R Fun's accountant would debit the (1. ?) (Merchandise Inventory/Accounts Payable/Cash) account and credit the (2. ?) (Cash/Merchandise Inventory/Accounts Payable) account.
- Merchandise inventory that is still available for sale is considered a(n
- Merchandise inventory that is still available for sale is reported on the
- Gross profit is calculated by taking the net (1. ?) (sales/costs) of a product and (2. ?) (adding/subtracting) the cost of the goods sold.
- A manufacturer's inventory consists of raw materials, work in process, and finished goods
- Show your understanding of what merchandise is by completing the following sentence. Merchandise consists of (1. ?) that a company acquires to resell to (2. ?).