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Purchase of Merchandise
Selling of Merchandise
Multi-Step Income Statement
Inventories
Fraud, Internal Control, and Cash
100
Merchandising companies that purchase and sell directly to consumers.
What are retailers?
100
Requires that they make two entries for each sale.
What is the sale of merchandise?
100
This is what it's called because it shows several steps in determining net income.
What is the multiple step income statement?
100
Basic goods that will be used in production but have not yet been places in production.
What are raw materials?
100
Opportunity, financial pressure, and rationalization.
What is the fraud triangle?
200
Ownership of the good remains with the seller until the gods reach the buyer.
What is FOB Destination?
200
Contra revenue account to Sales Revenue.
What is Sales Returns and Allowances/Sales Discounts?
200
Various revenues and expenses that are unrelated to the main company's main line of operations.
What are non operating activities?
200
Method that assumes that the earliest goods purchased are the first to be sold.
What is LIFO?
200
Permitting only designated personnel to handle cash receipts.
What is establishment of responsibility?
300
Purchased merchandise from Craig Co. for $25,000,terms 2/10,net 30.
What is the journal entry Dr. Inventory, Cr. Accounts Payable?
300
Sold merchandise for cash $7400. The merchandise sold had a cost of $4120.
What is journal entry Dr. Cash 7400, Cr. Sales Revenue 7400; Dr. COGS 4120, Cr. Inventory 4120.
300
The beginning of the multi step income statement.
What is Sales revenues, Sales return and allowances, sales discounts?
300
Method that results in the lowest income taxes.
What is LIFO?
300
The use of renumbered checks in disbursing cash.
What are documentation procedures?
400
Purchased racquets on account from Marx Co. then received credit of $40 for racquet that was returned.
What is journal entry Dr. Accounts Payable, Cr. Inventory?
400
Made refunds to cash customers for defective merchandise $90. The returned merchandise had a fair value of $30.
What is journal entry Dr. Sales Returns and Allowances 90, Cr. Cash 90; Dr. Inventory 30, Cr. COGS 30.
400
Gross profit/ Net sales.
What is Gross profit rate?
400
The basis where inventory is stated at the lower of either its cost or market value as determined by current replacement cost.
What is Lower of cost or market (LCM)?
400
On July 30 the petty cash fund (started with $50) has $12 remaining; petty cash receipts show postage expense $14, office supplies $10, and delivery expense $15.
What is the journal entry Dr. Postage expense 14, Dr. Supplies 10, Delivery expense 15; Cr. Cash 38, Cr. Cash over and short 1.
500
A credit sale of $750 is made on June 13 terms 2/10, net 30. A return of $50 is granted on June 16. The payment in full
What is $686?
500
Some Co. gives all of its customers credit terms of 1/10,n/30. Sold suitcases on account to Kaye Satchels on July 3 for $1800 and received full payment on July 12.
What is journal entry Dr. Cash 1782, Dr. Sales Discounts 18, Cr, A/R 1800.
500
The last line on the multi step income statement.
What is Net income?
500
An item must posses two characteristics to be classified as inventory by a merchandiser. What are they?
What is owned by the company and ready to sale in the business.
500
Limitations of internal control.
What are the human element and the size of the business?