Multiple Choice- Please Provide solution and explanation on each item for my guidan. It is much helpful and appreciated :)

1. A supplier offers the following discounts: Trade discounts of 10% at list price and

another cash discount of 5% if paid in full before the due date. How much is to be

paid if a customer pays before due date at a list price of P16,000?

a. P13,680

b. P15,520

C. P14,000

d. P16,000

2. A trade discount is:

a. shown in the sales journal.

b. shown in the purchase journal.

C. shown in the general journal.

d. not shown anywhere.

3. Which account does a merchandiser, but not a service entity, use?

a. Sales

b. Inventory

c. Cost of Goods Sold

a.All of the above

4. The two main inventory accounting systems are the following

a. purchase and sale.

b. returns and allowances.

c.cash and accrual.

d.perpetual and periodic.

Multiple Choice- Please Provide solution and explanation on each item for my guidan. It is much helpful and appreciated :)

1 Which of the following activities is not a comporfent of the operating cycle

a. Collection of cash from merchandise sales.

b Ordering of merchandise.

C. Purchase of merchandise.

d. Sale of merchandise.

2. Each of the following companies is a merchandising entity except a

a. candy store.

b.) car wash.

C. furniture store.

d. wholesale parts entity.

3. The periodic inventory system is used most commonly by companies that sell

a. high-priced, high-volume merchandise.

b. high-priced, low-volume merchandise.

C. low-priced, high-volume merchandise.

d. low-priced, low-volume merchandise.

4. A physical count of inventory is usually taken

a. at the end of the fiscal year.

b. at the peak of the busy season.

C. at the start of the fiscal year.

d. in the middle of the fiscal yar

A merchandiser will earn an operating income of exactly zero when

a. Cost of goods sold equals gross margin.

b. gross margin equals operating expenses.

c.net sales equals cost of goods sold.

d.operating expenses equal net sales.

6. oross margin equals the difference between net sales and

a. cost of goods sold.

b. Cost of goods sold plus operating expenses.

C.operating expenses.

d. profit.

7. Operating income will result if gross margin exceeds

a. cost of goods sold.

b. cost of goods sold plus operating expenses.

C. operating expenses.

d. purchases.

8. Which of the following terms does not mean the same as the othersS?

a. Bottom line

b. Gross profit

C. Operating profit

d. Profit from operations

9. Which of the following is not considered an operating expense?

a. Administrative expenses

b. Advertising expense

c. Cost of goods sold

d. Transportation out

10. Which of the following goods would not be included in merchandise inventory for a

purchasing entity?

a. Goods in transit shipped FOB destination

b. Goods in transit shipped FOB shipping point

c. Goods on hand in the showroom

d. Goods ordered and received from the supplier

11. A sale on March 21 with terms of n/10 eom is due to be collected bv

March 31.

b. April1.

C. April 10.

d. April 30.

12. An amount deducted from the catalog price for an item of merchandise is calledd

a. customer discount.

b. purchases discount.

c. sales discount.

d. trade discount.

13. Under the perpetual inventory system, which of the following accounts would not

be used?

a. Cost of Goods Sold

b. Merchandise Inventory

C. Purchases

d. Sales

4. Under the perpetual inventory system, in addition to making the entry to record a

sale, an entity would

a. debit Cost of Goods Sold and credit Merchandise Inventory.

b. debit Cost of Goods Sold and credit Purchases.

C. debit Merchandise Inventory and credit Cost of Goods Sold.

d. make no additional entry until the end of the period.

15. The entry to record the return of goods from a customer would include a

a. credit to Sales.

b. credit to Sales Returns and Allowances.

C. debit to Sales.

d. debit to Sales Returns and Allowances.

16. Under the perpetual inventory system, the entry to record a purchase return would

include a credit to

a. Accounts Payable.

b. Cost of Goods Sold.

C. Merchandise Inventory.

d. Purchases Returns and Allowances.

17. Under the perpetual inventory system, in addition to making the entry to record a

sales return, an entity would

a. debit Cost of Goods Sold and credit Merchandise Inventory.

b. debit Cost of Goods Sold and credit Purchases.

C. debit Merchandise Inventory and credit Cost of Goods Sold.

d. make no additional entry until the end of the period.

18Merchandise inventory becomes part of cost of goods sold when an entity

a. pays for the inventory.

b. purchases the inventory.

Creceives payment from the customer.

d. sells the inventor

Use the following information to answer questions 19 to 23 below:

Account Name Debit Credit

Sales 750,000

Sales Returns and Allowances 15,000

Sales Discounts 10,000

Purchases 170,000

Purchases Returns and Allowances 20,000

Transportation In 30,000

Selling Expenses 75,000

General and Administrative Expenses 275,000

In addition, beginning merchandise inventory was P55,000 and ending merchandise

inventory was P35,000.

19. Net sales for the period were

a. P755,000.

b. P725,000.

C. P735,000.

d. P775,000.

20. Net purchases for the period were

a. P150,000.

b. P180,000.

C. P210,000.

d. P430,000.

21. Cost of goods sold for the period was

a. P235,000.

b. P160,000.

C. P200,000.

d. P170,000.

22. Profit for the period was

a. P525,000.

b. P450,000.

C. P250,000.

d. P175,000.

23. If beginning and ending merchandise inventories were ignored in computing proti,

then profit would be

d overstated by P20,000.

b. understated by P55,000.

C.understated by P35,000.

d. understated by P20,000.

24. Which of the following is not considered in computing net cost of purchases

a. Purchases

b. Purchases returns and allowances

C. Transportation paid on goods shipped to customers

d. Transportation paid on purchased goods

25. The entry to record a sale of P7,500 with terms of 2/10, n/30 would include a

a. credit to Accounts Receivable for P7,500.

b. credit to Sales for P7,500.

C. debit to Sales Discounts for P150.

d. debit to Sales for P7,350.

26. The collection of a P4,000 account within the 2% discount period would result in a

a. credit to Accounts Receivable for P3,920.

b. credit to Cash for P3,920.

C. debit to Accounts Receivable for P3,920.

d. debit to Sales Discounts for P80.

27. The collection of a P5,000 account beyond the 2% discount period would result in a

a. credit to Accounts Receivable for P5,000.

6. credit to Cash for PS,000.

C. debit to Cash for P4,900.

d. debit to Sales Discounts for P100.

oAssuming that net purchases was P00,000 during the year and that ending

28. merchandise inventory was P20,000 1esS tnan the beginning merchandise inventory

of P250,000, how much was cost of goods sold?

a. P1,130,000

b. P670,000

C. P920,000

d. P1,170,000

29. Goods totaling P50,000 were purchased February 2 with terms of 2/10, n/30.

Returns of P10,000 were made on February 10. What discounts, if any, can be

availed of if the invoice was paid on February 12?

a. None

b. P1,000

C. P800

d. P2000

30. The entry to record a payment on a P15,000 account within the 2% discount period

would include a

a. credit to Accounts Payable for P15,000.

b. credit to Purchases Discounts for P300.

C. debit to Accounts Payable for P14,700.

d. debit to Cash for P15,000

31. A P5,000 purchases on account was made. The entry to record the payment on

account after the expiration of the 2% discount period would include a

a. credit to Accounts Payable for P4,900

b. credit to Cash for P4,900.

C. debit to Accounts Payable for P5,000.

d. debit to Purchases Discounts for P100.

32. Under a periodic inventory system, the entry to record a purchase of P60,000, with

terms of 2/10, n/30 would include a

a. credit to Accounts Payable for P60,000.

b. credit to Purchases for P60,000.

C. debit to Accounts Payable for P58,800.

d. debit to Purchases Discounts for P1,200

33. The amount of cost of goods available for sale during the year depends on the

amounts of

a. beginning merchandise inventory and cost of goods sold,

b. beginning merchandise inventory and net purchases.

c. beginning merchandise inventory, cost of goods sold, and ending merchandise

inventory.

d. beginning merchandise inventory, net purchases, and ending merchandise

inventory.

Multiple Choice- Please Provide solution and explanation on each item for my guidan. It is much helpful and appreciated :)

1, A buyer received an invoice for P6,000 dated June 10. If the terms are 2/10, n/30,

and the buyer paid the invoice within the discount period, what amount will the

seller receive?

a. P6,000 C. P4,800

b. P5,880 d. P 120

2. The purchases discount account is a contra account to

a. accounts payable. C. sales.

b. purchases. d. sales discount.

3. When a seller of, merchandise allowed a customer a reduction from the original

price for defective goods, the seller will issue to the customera

a. credit memorandum. C. official receipt.

b. debit memorandum. d. sades invoice.

4. When the seller advances the transportation costs and the terms of sale are FOB

shipping point, the seller records the payment of the transportation costs by

debiting

a. accounts payable. C. sales.

b. accounts receivable. d. transportation in.

5. The account that appears in the chart of accoOunts for a merchandising entity but not

for a service entity is

a. accounts receivable. C. advertising expense.

b. accumulated depreciation. d. sales returns and allowances.

6. Olive Valenzuela Traders purchased merchandise from San Jose Suppliers for P3,600

list price, subject to a trade discount or 25%. The goods were purchased on terms of

2/10, n/30, F.O.B. destination. Valenzuela paid P100 transportation costs.

Valenzuela returned P400 (list price) of the merchandise to San Jose and later paid

the amount due within the discount period. The amount paid is

a. P2,254. C. P2,246.

b. P2,252. d. P2,352.

7.Grace Ancheta Company which uses ne gross price method of recording purchases,

and the periodic inventory system, bought merchandise for P8,000, terms 2/10,

n/30. If Ancheta returns P2,000 of the goods to the vendor, the entry to record the

return should include a

a.credit to purchases returns and allowances of P1,960.

b. debit to accounts payable of P2,000.

c. debit to discounts lost of P40.

d. debit to purchases returns and allowances of P1,960.

8. The Dec. 31, 2019 trial balance for Aileen Maglana Company included the followine:

purchases, P40,000; purchases returns and allowances, P2,000; transportation in,

P3,000; ending inventory was P8,000. What was the cost of goods sold for 2019?

a. P39,000 c. P38,000

b. P33,000 d. none of the above

9. In preparing a ten-column worksheet for a merchandising firm that uses the periodic

inventory system

a. the beginning inventory is extended as a credit in the balance sheet columns.

b. the beginning inventory is extended as a credit in the income statement columns.

C. the ending inventory is shown as a credit in the income statement columns and as a debit in the balance sheet columns.

d. the ending inventory is shown as a debit in the income statement columns and as a credit in the balance sheet columns.

10. The basic differences between the financial statements of a merchandising entity

and a service entity include the cost of goods sold section of the income statement and the

a. equity section of the balance sheet.

b. inclusion of merchandise inventory on the balance sheet as a current asset.

C. other income section of the income statement.

d. profit figure.

11. The excess of net sales over the cost of goods sold is called

a. gross profit. C. operating profit.

b. merchandising income. d. profit.

12. After all adjusting entries are posted, the balances of all asset, liability, income

expense accounts correspond exactly to the amounts in the income, and

a. financial statements. C. unadjusted trial balance.

b. post-closing trial balance. d. worksheet trial balance.