Accounting For Merchandising quiz

Financial Accounting Quiz

On Nov 6, 2025

Accounting For Merchandising

10 questions in 10 minutes

Pass Score 70%

1 / 10

The sales accounts that normally have a debit balance are :

Sales Returns and Allowances

(Sales Discounts) and (Sales Returns and Allowances)

Neither (Sales Discounts) nor (Sales Returns and Allowances)

Sales Discounts

2 / 10

Under a perpetual inventory system, when goods are purchased for resale by a company :

purchase returns are debited to Purchase Returns and Allowances

purchases on account are debited to Inventory

purchases on account are debited to Purchases

freight costs are debited to Freight Out

3 / 10

Gross profit will result if:

sales revenues are greater than operating expenses

sales revenues are greater than cost of goods sold

operating expenses are less than net income

operating expenses are greater than cost of goods sold

4 / 10

In a worksheet using a perpetual inventory system, Inventory is shown in the following columns :

adjusted trial balance debit and balance sheet debit

income statement credit and balance sheet debit

income statement debit and balance sheet debit

income statement credit and adjusted trial balance debit

5 / 10

The multiple step income statement for a merchandising company shows each of the following features except :

a sales revenue section

cost of goods sold

an investing activities section

gross proft

6 / 10

A single step income statement :

reports operating income separately

reports gross proft

does not report cost of goods sold

reports sales revenues and “Other revenues and gains” in the revenues section of the income statement

7 / 10

To record the sale of goods for cash in a perpetual inventory system :

only one journal entry is necessary to record cost of goods sold and reduction of inventory

two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory

only one journal entry is necessary to record the receipt of cash and the sales revenue

two journal entries are necessary: one to record the receipt of cash and reduction of inventory, and one to record the cost of goods sold and sales revenue

8 / 10

If sales revenues are $500,000, cost of goods sold is $400,000, and operating expenses are $50,000, the gross proft is :

$450,000

$500,000

$100,000

$50,000

9 / 10

The steps in the accounting cycle for a merchandising company are the same as those in a service company except :

an additional adjusting journal entry for inventory may be needed in a merchandising company

closing journal entries are not required for a merchandising company

a multiple-step income statement is required for a merchandising company

a post-closing trial balance is not required for a merchandising company

10 / 10

When goods are purchased for resale by a company using a periodic inventory system :

freight costs are debited to Purchases

purchase returns are debited to Purchase Returns and Allowances

purchases on account are debited to Inventory

purchases on account are debited to Purchases

Your score is

Question topics

perpetual and periodic inventory systems

Purchase returns and allowances – Purchase discounts – Freight costs

Multiple step income statement * Single step income statement

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