1. which of the following accounts would not appear on a worksheet for a merchandising entity

that uses the periodic inventory system?

a. Cost of Goods Sold

b. Purchases

c. Sales Returns and Allowances

d. Transportation.

2. Which of the following accounts would appear on a worksheet for a merchandising entity that

uses the perpetual inventory system?

a. Cost of Goods Sold

b. Income Summary

c. Purchases

d. Purchases Returns and Allowances

3. The closing entries for a merchandising entity using the perpetual inventory system

a. are fewer in number than if the periodic system were used.

b. are the same regardless of inventory system used.

c. calculate the gross profit in the Income Summary account.

d. do not affect the Merchandise Inventory account.

4. Which of the following accounts would not be closed by a merchandising entity that uses the

perpetual inventory system?

a. Cost of Goods Sold

b. Income Summary

c. Merchandise Inventory

d. Sales Returns and Allowances

9, On a worksheet prepared for a merchandising entity that uses the perpetual inventory

system,

a. the components of cost of goods sold are contained in several accounts in the Income

Statement columns.

b. the Income Summary account is used to adjust the Owner's Capital account.

c. the inventory amount in the Balance Sheet columns is the same as in the Trial Balance

columns

d. the Owner's Withdrawals account is closed into the Owner's Capital account.

10. Which of the following accounts would appear on a worksheet for a merchandising entity

that uses the periodic inventory system?

a. Cost of Goods Sold

b. Income Summary

c. Purchases Returns and Allowances

d. All of these

11. Which of the following accounts is closed by debiting the account?

a. Purchases

b. Purchases Returns and Allowances

c. Sales Returns and Allowances

d. Transportation In

12. Which of the following accounts is unique to a merchandising entity that uses the periodic

inventory system?

a. Cost of Goods Sold

b. Merchandise Inventory

c. Purchases

d. Transportation In

13. The Merchandise Inventory account balance in the Trial Balance columns of a worksheet for

a merchandising entity that uses the periodic inventory system

a. appears in both the debit and the credit columns.

b. appears in the credit column only.

c. is correct as stated.

d. is the same as it was at the beginning of the period.

14. Jan Cahilig Traders started operating in 2020. for the year ended 2020, the sales,

purchases and closing inventory are P500,000, P200,000 and PIO,OOO respectively. What is

the amount of cost of goods sold for the year ended 2020?

a. P190,000 c. P790,000

b. P200,000 d. P800,000

15. Refer to Question 14, what is the gross profit for the entity?

a. P200,000 c. P300,000

b. P310,000 d. P490,000

Based on the following information, answer Questions 16 to 20.

An entity has the following accounting information for the year:

Sales 400,000

Purchases 90,000

Opening Inventory 30,000

Sales Returns 80,000

Purchases Returns 70,000

Transportation In 40,000

Transportation Out 10,000

Salaries 9,000

Other Revenues 4,000

General Expenses 7,000

Gross Profit 250,000

16. What is the amount of net sales of the entity?

a. P260,000 c. P280,000

b. 320,000 d. P330,000

17. What is the amount of net purchases of the entity?

a. P20,000 c. P50,000

b. 30,000 d. P60,000

18. What is the amount of closing inventory of the entity?

a. P10,000 c. P20,000

b. 30,000 d. P40,000

19. What is the amount of profit for the year?

a. P48,000 c. P198,000

b. 188,000 d. P228,000

20. Which of the following is/are not relevant to the calculation of net sales?

1. cash sales

2. sales returns

3. sales discounts

a. (2) only c. (1) and (2) only

b. (3) only d. (2) and (3) only

Adjusting Entry for Merchandise Inventory

Listed below is a partial trial balance of the Charito Guillermo Retailers at Dec. 31, 2020'.

Merchandise Inventory P80,000

Sales P190,000

Sales Returns and Allowances 20,000

Purchases 60,000

Purchases Discounts 3,000

Transportation-ln 1,000

The merchandise inventory on Dec. 31 is P74,000

Required:

1. Prepare the adjusting entry needed for merchandise inventory.

2. Prepare the partial income statement