Merchandising Operations and Inventory Quiz

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Questions and Answers

What was the total cost of equipment sold during the year?

$8,000 (correct)

$30,000

$4,000

$25,000

The net cash provided by investing activities was a negative amount.

True

What was the balance of common stock at the end of the period?

$70,000

The purchase of equipment amounted to ______.

$25,000 Signup and view all the answers

Match the following cash flow activities with their corresponding amounts:

Purchase of equipment = ($25,000) Sale of equipment = $4,000 Issuance of common stock = $20,000 Payment of cash dividends = ($29,000) Signup and view all the answers

What is the total net increase in cash at the end of the period?

$22,000 Signup and view all the answers

The net cash provided by financing activities was positive.

False Signup and view all the answers

What was the cash balance at the beginning of the period?

$33,000 Signup and view all the answers

What is added back to net income when calculating cash flows from operating activities?

Loss on disposal of plant assets Signup and view all the answers

A gain on disposal of plant assets is added to net income in the operating activities section.

False Signup and view all the answers

What is the net cash provided by operating activities after adjustments for depreciation and loss on disposal?

$157,000 Signup and view all the answers

The loss on disposal of plant assets is calculated as the difference between the ______ and the proceeds from the sale.

book value Signup and view all the answers

Match the following adjustments with their descriptions:

Depreciation expense = It is added back to net income. Loss on disposal = It is added back to net income. Proceeds from sale = It is reported in investing activities. Gain on disposal = It is deducted from net income. Signup and view all the answers

Which of the following reflects the book value at the date of disposal for the given equipment?

$7,000 Signup and view all the answers

A decrease in Accounts Receivable indicates that cash receipts are greater than revenue earned.

True Signup and view all the answers

What was the loss on disposal of the plant assets calculated in the content?

$3,000 Signup and view all the answers

What is the free cash flow calculated for Apple?

$44,777 Signup and view all the answers

A high price to cash flow ratio suggests that the stock is undervalued.

False Signup and view all the answers

What is the primary source of revenue for merchandising companies?

Sales revenue Signup and view all the answers

Cost of goods sold is the total cost of merchandise sold during the ______.

period Signup and view all the answers

Match the following terms with their definitions:

Cash flow per share = Cash generated per share of stock Expenditures on property = Investments in capital assets Dividends paid = Shareholder payments from profits Operating activities = Cash generated from core business functions Signup and view all the answers

Which of the following is not included in the calculation of free cash flow?

Cost of goods sold Signup and view all the answers

Merchandising companies do not usually operate under a perpetual inventory system.

False Signup and view all the answers

What does the price to cash flow ratio indicate?

The relationship of stock price to a company's ability to generate cash. Signup and view all the answers

What is the primary purpose of sales discounts?

To promote prompt payment Signup and view all the answers

Sales discounts are added to revenues on the income statement to determine net sales.

False Signup and view all the answers

What effect does analyzing data regarding customers have on a company?

It helps expand the sales base while minimizing unpaid receivables. Signup and view all the answers

De La Hoya sold merchandise on account for a selling price of $______.

1,100 Signup and view all the answers

Match the following companies with their practices related to data analytics:

Best Buy = Customer return policies refinement REI = Customer return policies refinement Costco = Customer return policies refinement PW Audio Supply = Recording cash receipts Signup and view all the answers

What was the cost of the goods sold by De La Hoya when selling to Marin Inc.?

$750 Signup and view all the answers

Sales returns occur when goods sold are returned to the seller.

True Signup and view all the answers

On what date did De La Hoya sell merchandise to Marin Inc.?

September 20 Signup and view all the answers

Which of the following is classified as property, plant, and equipment?

Land Signup and view all the answers

Intangible assets include physical items such as furniture and equipment.

False Signup and view all the answers

What is the purpose of depreciation in accounting?

To allocate the cost of assets over their useful lives. Signup and view all the answers

Patents and copyrights are classified as ______ assets.

intangible Signup and view all the answers

Which of the following is considered a long-term asset?

Bonds receivable Signup and view all the answers

Accumulated depreciation represents the total amount of depreciation expensed in an asset's life.

True Signup and view all the answers

Land is considered a ______ asset because it has an indefinite useful life.

long-term Signup and view all the answers

Match the following asset categories with their definitions:

Intangible Assets = Assets that lack physical substance Property, Plant, and Equipment = Assets with long useful lives used in operations Accumulated Depreciation = Total depreciation expensed to date Long-term Investments = Assets not currently used in operations like land or notes receivable Signup and view all the answers

Study Notes