True or False
Say the credit terms are n/30. This means you have until the end of the month to pay.
False
What is the account that is debited when you purchase inventory?
Merchandise Inventory
Cooper Trooper Company bought $2,900 of merchandise inventory on account, terms were FOB shipping point, n/30.
Merch Inventory 2900
Accounts Payable 2900
Everett Supply sold merchandise for $5,000, FOB destination, n/30. The merchandise cost $3,200. Provide the journal entry showing Sales Revenue.
Accounts Receivable 5000
Sales Revenue 5000
Formula for Gross Profit
Net Sales Rev-COGS
If a purchasing company (a company buying merchandise inventory) returns some of their good, they would debit accounts payable on their journal entry.
True
The selling company has to pay freight. This is called FOB...
Destination
Lee Loo La Company purchased merchandise, FOB Shipping point and shipping costs of $440.
Record the shipping cost.
Merchandise Inventory 440
Cash 440
Everett Supply sold merchandise for $5,000, FOB destination, 2/10, n/30. The merchandise cost $3,200. Provide the journal entry showing Cost of goods sold.
Cost of Goods Sold 3200
Merchandise Inventory 3200
Gross Profit/Net Sales Rev
Under a perpetual inventory system, you need to do a weekly count of the inventory.
False
Which account is typically a merchandiser's most major COST?
Cost of Goods Sold
Aeden returned $600 of defective merchandise that had been purchased on Aug 5th
Accounts Payable 600
Merch Inventory 600
Myers Ridge Supply sold merchandise for $5,000, FOB destination,n/30. The merchandise cost $3,200. Riley (employee of Myers Ridge) paid transportation costs of $100 to ship the goods to the customer. Provide the journal entry to record transportation cost.
Freight In 100
Cash 100
A company had $15,000,000 in COGS. $38,000,000 in Net Sales Revenue. What is the Gross Profit Margin
?
60.5%
As the purchaser, Freight in (shipping costs) is added to the cost of merchandise inventory.
True
The account that is debited when MERCHANDISE INVENTORY is returned by a customer.
Sales returns and allowances
William Harper bought $2,900 of merchandise purchased n/ 30 and returned $600 of merchandise.
Merch inventory 2900
Accounts Payable 2900
Accounts Payable 600
Merchandise Inventory 600
Pepper Rye Supply sold merchandise to a customer on account. 2 days later, the customer returned $1,000 of their purchased merchandise. That returned merchandise had cost $600. Provide both entries to show a return.
Sales Returns and Allowance 1000
Accounts Receivable 1000
Merchandise Inventory 600
COGS 600
If a company had $34,680 in Net Sales Revenue, and their Gross Profit Percentage was 42.8%, what would the COGS be?
$19,836.96