True or False
Say the credit terms are 2/20, n/EOM. You pay off your account in 17 days. You would not get the discount.
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. Freight and credit terms were FOB shipping point, 3/15, n/60
Merch Inventory 2900
Accounts Payable 2900
Everett Supply sold merchandise for $5,000, FOB destination, 2/10, n/30. The merchandise cost $3,200. Provide the journal entry showing Sales Revenue.
Accounts Receivable 4900
Sales Revenue 4900
Formula for Gross Profit
Net Sales Rev-COGS
What past president was rumored to have gotten stuck in a bathtub only to be removed after 6 people helped pry him out?
William Howard Taft
The selling company has to pay freight. This is called FOB...
Destination
Lee Loo La Company PAID freight in of $440.
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
If a purchasing company (a company buying merchandise inventory) returns some of their goods, they would debit accounts payable on their journal entry.
True
Which account is typically a merchandiser's most major COST?
Cost of Goods Sold
Aden 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, 2/10, n/30. The merchandise cost $3,200. Myers Ridge paid transportation costs of $100 to ship the goods to the customer. Provide the journal entry to record transportation cost.
Delivery Expense 100
Cash 100
How many days were there total in the years 1996-2020?
9,132 days (7 leap years)
Under a perpetual inventory system, you need to do a weekly count of the inventory.
False
The account that is adjusted when estimating the amount of MERCHANDISE INVENTORY that will be returned.
Estimated Returns Inventory
Marie Arnold Company paid for $2,900 of merchandise that was purchased on Aug 5th on account. No discount needed.
Accounts Payable 2900
Cash 2900
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.
Refunds Payable 1000
Accounts Receivable 1000
Merchandise Inventory 600
Estimated Returns Inventory 600
A company had $15,000,000 in COGS. $38,000,000 in Net Sales Revenue. What is the Gross Profit Percentage?
60.5%
Freight in is added to the cost of merchandise inventory when using FOB shipping point.
True
When a customer does not pay for merchandise within the discount period, the selling company will credit this account.
Sales Discount Forfeited
William Harper paid for $2,900 worth of merchandise purchased 1 week earlier (7 days). After purchase, he returned $600 of merchandise. The credit terms were 2/15, n/60.
Record the payment entry.
Accounts Payable 2300
Cash 2254
Merch inventory 46
Oscar Meyer Hot Dogs sold merchandise for $6,000, FOB destination, 4/10, n/30. The merchandise cost $2,200. Record the journal entry to record receipt of payment NOT within the discount period.
Cash 6,000
Accounts Receivable 5760
Sales Discount Forfeited 240
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