Shilling uses the perpetual inventory system

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On May 1, Shilling Company, Inc. sold merchandise in the amount of $5,800 to Anders, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Shilling uses the perpetual inventory system. The journal entry or entries that Shilling will make on May 1 is: Accounts receivable 5,800 Sales 5,800 Cost of goods sold 4,000 Merchandise inventory 4,000 Accounts receivable 4,000 Sales 4,000 Sales 5,800 Accounts receivable 5,800 Accounts receivable 5,800 Sales 5,800 Sales 5,800 Accounts receivable 5,800 Cost of goods sold 4,000 Merchandise Inventory 4,000 QUESTION 6 Beginning inventory plus net purchases is: Sales. Merchandise (goods) available for sale. Shown on the balance sheet. Ending inventory. Cost of goods sold. QUESTION 7 A merchandising company's operating cycle begins with the purchase of merchandise and ends with the collection of cash from the sale. True False QUESTION 8 A single-step income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses. True False QUESTION 9 Under a perpetual inventory system, when a credit customer returns merchandise to the seller, the seller debits Sales Returns and Allowances and credits Accounts Receivable and also debits Merchandise Inventory and credits Cost of Goods Sold. True False QUESTION 10 A company's net sales are $775,420, its costs of goods sold are $413,890, and its net income is $117,220. Its gross margin ratio equals: 28.3%. 40.5%. 46.6%. 53.4%. 31.5%.

Reference no: EM131206475

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