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Generally, the revenue account for a merchandising business is entitled

Sales

the term applied to the excess of net revenue from sales over the cost of merchandise sold?

Gross Profit

Merchandise with a sales price of $800 is sold on account with term 2/10, n/30. The journal entry to record the sale would include a

Credit to Sales for $800

Merchandise subject to terms 1/10, n/30, FOB shipping point, is sold on account to a customer for $25,000. The seller issued a credit memo for $10,000 prior to payment. What is the amount of the cash discount allowable

$150

4/15 n/30

Customer Would receive a 4 percent discount if paid before 15 days it must all be paid for in 30 days

Merchandise is sold for cash. The selling price of the merchandise is $3,000 and the sale is subject to a 7% state sales tax. The journal entry to record the sale would include

(3,000*.07)

last-in, first-out

Ending inventory is made up of the oldest purchases when a company uses

Inventory Turnover ( Formula)

Cost of goods sold / Average Inventory

Average Inventory ( Formula )

Beginning Inventory ( Cost) + Ending Inventory (Cost /2

Average days to sell the inventory

365(days)/ Inventory Turn over

For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory turnover was 7.9 Depot Max's number of days sales in inventory is closest to

47

IC fitness has a inventory turnover of 11.2 Ic fitness number of days sales in inventory is

32.5

For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Compute Depot Max's inventory turnover for the year.

7.9
(Avg Inv = 6540+7250/2 = 6895
Inv Turnover = 54,350 / 6,895 )

The two methods of accounting for uncollectible receivables are

he allowance method and the Direct Write - off Method

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

when an account is determined to be worthless

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

Accounts Receivable

Dalton Company uses the allowance method to account for uncollectible receivables. Dalton has determined that the Irish Company account is uncollectible. To write-off this account, Dalton should debit

Allowance for Doubtful Accounts and credit Accounts Receivable

A 60-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

$10,200

If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as

FOB shipping point

The receivable that is usually evidenced by a formal instrument of credit is a(n)

note receivable

The amount of the promissory note plus the interest earned on the due date is called the

maturity value

The journal entry to record a note received from a customer to apply on account is

debit Notes Receivable; credit Accounts Receivable

On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

300 [20,000.06(90/360)]

A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is

debit Accounts Receivable, $6,120; credit Notes Receivable, $6,000; Credit Interest Revenue, $120

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