On April 4, Fignola Company (FC) sold sweaters to one of its customers for $65,000 on credit terms of 3/15, net 30. On April 8, the customer contacted FC to say that the sweater colours did not match their original order. FC reached an agreement with the customer to keep the shipment and FC granted the customer a price reduction of $3,000. The customer paid the outstanding bill on April 15. The journal entry to be made by FC on April 15 is Multiple Choice Debit Sales Returns and Allowances $3,000; Credit Accounts Receivable $3,000 LEUIL Accounts Receivable $62,000; Credit Sales Revenue $62,000 Debit Cash $62,000; Credit Accounts Receivable $62,000 Debit Cash $60,140; Debit Sales Discounts $1,860; Credit Accounts Receivable $62,000 Shrinkage 52 Multiple Choice 01:08:15 Refers to the loss of inventory for merchandising companies O Is not able to be directly measured by a perpetual inventory system Is recognized by debiting Cost of Goods Sold Can arise because of theft and deterioration of merchandise All of the above 53 An income statement on which the cost of goods sold, and operating expenses are added together and subtracted from net sales in one step to get profit is a(n) 01:07:41 Multiple Choice Balanced income statement Single- step income statement Multiple- step income () Multiple- step income statement Merchandise income statement Unclassified income statement 54 Classified multiple-step income statements 8 01:07:12 Multiple Choice Are required by Canada Revenue Agency O Are generally used for internal reporting Are required for the perpetual system List cost of goods sold as an operating expense Do not report gross profit Gross profit is derived from 55 Multiple Choice 8 01:06:45 O Sales Beginning inventory O Ending inventory O Cost of goods sold All of the above 56 A car dealership has a used truck on its lot that it bought for $10,000 and is selling it for $20,000. The rate of markup on cost is 8 01:06:18 Multiple Choice 20% O 30% o 50% o 100% 56 20% 8 01:06:10 30% 50% 100% O None of these answers is correct. 57 JEANSTOP sells jeans that cost it $43.99 per pair for $62.99 per pair. The percentage markup on cost is 8 01:05:58 Multiple Choice 30.2% O 43.2% O 46.0% 185.3% 30.2% O 57 43.2% O 2 01:05:49 46.0% O 185.3% None of these answers is correct. 58 You work at a sporting goods store. You are considering adding baseball gloves and bats to your inventory. What would be the selling price of baseball bats with a mark-up percentage of 85% (cost is $12) and the baseball gloves with a target gross margin of 60% (cost is $20). 01:05:42 Multiple Choice O Selling Price (bats) = $32; Selling Price (gloves) = $10.2 Selling Price (bats) = $37; Selling Price (gloves) = $22 Selling Price (bats) = $22.20; Selling Price (gloves) = $50 Selling Price (bats) = $24; Selling Price (gloves) $25.00 () None of these answers is correct. 59 If a merchandising company ends a period with a larger inventory than it owned at the beginning of the period, then, 8 01:05:09 Multiple Choice O The cost of goods sold was larger than net purchases. O Profit was larger than gross profit. 59 The cost of goods sold was smaller than net purchases. 01:04:59 The cost of goods available for sale was smaller than the cost of goods sold. O Gross profit was larger than the cost of goods sold. 60 The agreed cost of an item to be purchased by a business on credit is $4,000. The applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST). When this transaction is recorded, what amount will be debited to advertising expense? 2 01:04:49 Multiple Choice O $4,000 o $4,200 O $4,280 $4,000 60 8 $4,200 01:04:35 $4,280 O $4,480 O None of these answers is correct. Selling Price (bats) = $37; Selling Price (gloves) = $22 Selling Price (bats) = $22.20; Selling Price (gloves) = $50 Selling Price (bats) = $24; Selling Price (gloves) $25.00