Accounting For Merchandising quiz

Financial Accounting Quiz

On Apr 7, 2026

Accounting For Merchandising

10 questions in 10 minutes

Pass Score 70%

1 / 10

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

a sales revenue section

an investing activities section

gross proft

cost of goods sold

2 / 10

The sales accounts that normally have a debit balance are :

(Sales Discounts) and (Sales Returns and Allowances)

Sales Discounts

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

Sales Returns and Allowances

3 / 10

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

$50,000

$100,000

$500,000

$450,000

4 / 10

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

closing journal entries are not required for a merchandising company

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

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

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

5 / 10

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

purchases on account are debited to Inventory

purchases on account are debited to Purchases

freight costs are debited to Freight Out

purchase returns are debited to Purchase Returns and Allowances

6 / 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

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

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

7 / 10

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

purchases on account are debited to Purchases

freight costs are debited to Purchases

purchase returns are debited to Purchase Returns and Allowances

purchases on account are debited to Inventory

8 / 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

9 / 10

A single step income statement :

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

reports operating income separately

reports gross proft

does not report cost of goods sold

10 / 10

Which of the following appears on both a single-step and a multiple-step income statement ?

Cost of goods sold

Income from operations

Inventory

Gross proft

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