Self Assessment Quizzes

CHAPTER 14: Section 1 Accounting for a Merchandising Business

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

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

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

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

	3.	The normal balance of the Sales account is

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

	4.	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

	5.	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

	6.	The goods bought for resale are called

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

	7.	A business that sells to the consumer is a

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