Self Assessment Quizzes

CHAPTER 14: Section 1 Accounting for a Merchandising Business

	1.	The goods bought for resale are called

		a.	inventory
		b.	stock
		c.	merchandise
		d.	goods

	2.	When a sale on account is recorded, the alternate side of the journal entry is

		a.	a debit to Accounts Receivable
		b.	a credit to Accounts Receivable
		c.	a debit to Cash in Bank
		d.	a credit to Cash in Bank

	3.	A merchandising business produces revenue through a series of transactions called the

		a.	business cycle
		b.	operating cycle
		c.	accounting cycle
		d.	bicycle

	4.	The normal balance of the Sales account is

		a.	zero
		b.	a debit
		c.	a credit
		d.	either a debit or a credit

	5.	The items of merchandise a business has in stock are referred to as

		a.	inventory
		b.	stock
		c.	trade merchandise
		d.	goods

	6.	At the beginning of an accounting period, the dollar amount of merchandise in stock is indicated by

		a.	a debit in the Merchandise Inventory account
		b.	a credit balance in the Merchandise Inventory account
		c.	a debit balance in the Purchases account
		d.	a credit balance in the Purchases account

	7.	A business that sells to the consumer is a

		a.	wholesaler
		b.	sole proprietor
		c.	retailer
		d.	merchandiser