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Qualifications · Bookkeeping Grade 3 (Nissho Boki) Lab

Merchandise Transactions

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Q1 | Freight-in on purchases

Using the three-account method, the company bought goods for ¥200,000 on credit and paid freight-in of ¥4,000 (borne by the company) in cash. Which journal entry is correct?

  1. Dr Purchases (仕入) 200,000, Shipping expense (発送費) 4,000 / Cr Accounts payable (買掛金) 200,000, Cash (現金) 4,000
  2. Dr Purchases (仕入) 204,000 / Cr Accounts payable (買掛金) 200,000, Cash (現金) 4,000
  3. Dr Purchases (仕入) 204,000 / Cr Accounts payable (買掛金) 204,000
  4. Dr Purchases (仕入) 200,000, Commission expense (支払手数料) 4,000 / Cr Accounts payable (買掛金) 200,000, Cash (現金) 4,000
AnswerB. Dr Purchases (仕入) 204,000 / Cr Accounts payable (買掛金) 200,000, Cash (現金) 4,000

Freight-in borne by the buyer is part of the cost of acquiring the goods, so it is included in Purchases: 200,000 + 4,000 = 204,000. The freight was paid in cash, so the credits are Accounts payable 200,000 and Cash 4,000. Shipping expense (発送費) is used for shipping when selling, and Commission expense (支払手数料) is for fees, so those are wrong. Crediting the freight to Accounts payable contradicts the cash payment.

Q2 | Shipping expense on sales

Using the three-account method, the company sold goods for ¥150,000 on credit and paid the shipping cost of ¥3,000 (borne by the company) in cash. Which journal entry is correct?

  1. Dr Accounts receivable (売掛金) 153,000 / Cr Sales (売上) 150,000, Cash (現金) 3,000
  2. Dr Accounts receivable (売掛金) 150,000, Purchases (仕入) 3,000 / Cr Sales (売上) 150,000, Cash (現金) 3,000
  3. Dr Accounts receivable (売掛金) 147,000, Shipping expense (発送費) 3,000 / Cr Sales (売上) 150,000
  4. Dr Accounts receivable (売掛金) 150,000, Shipping expense (発送費) 3,000 / Cr Sales (売上) 150,000, Cash (現金) 3,000
AnswerD. Dr Accounts receivable (売掛金) 150,000, Shipping expense (発送費) 3,000 / Cr Sales (売上) 150,000, Cash (現金) 3,000

Shipping paid by the seller is the seller's expense, recorded as Shipping expense (発送費). The ¥150,000 sale is Accounts receivable / Sales, and the cash payment for shipping adds Dr Shipping expense 3,000 / Cr Cash 3,000. Adding the shipping to Accounts receivable is the treatment for charging it to the buyer, which is not tested at Grade 3. Purchases is for freight on buying. Deducting the shipping from Accounts receivable contradicts the cash payment.

Q3 | Sales returns

Using the three-account method, goods worth ¥20,000 sold on credit the other day were returned because the wrong item was sent. The amount is deducted from accounts receivable. Which journal entry is correct?

  1. Dr Sales (売上) 20,000 / Cr Accounts receivable (売掛金) 20,000
  2. Dr Accounts receivable (売掛金) 20,000 / Cr Sales (売上) 20,000
  3. Dr Purchases (仕入) 20,000 / Cr Accounts receivable (売掛金) 20,000
  4. Dr Sales (売上) 20,000 / Cr Accounts payable (買掛金) 20,000
AnswerA. Dr Sales (売上) 20,000 / Cr Accounts receivable (売掛金) 20,000

A sales return reverses the sales entry (Dr Accounts receivable / Cr Sales), reducing Sales and Accounts receivable. The reversed entry would increase Sales further. Purchases is used for returning goods you bought. Accounts payable is a debt to suppliers and is not used to reduce a customer's receivable.

Q4 | Perpetual method: a sale

The company records merchandise using the method of transferring cost to Cost of goods sold at each sale (売上原価対立法). It sold goods costing ¥60,000 for ¥90,000 on credit. Which journal entry is correct?

  1. Dr Accounts receivable (売掛金) 90,000 / Cr Sales (売上) 90,000
  2. Dr Accounts receivable (売掛金) 90,000 / Cr Merchandise (商品) 60,000, Sales (売上) 30,000
  3. Dr Accounts receivable (売掛金) 90,000, Cost of goods sold (売上原価) 60,000 / Cr Sales (売上) 90,000, Merchandise (商品) 60,000
  4. Dr Accounts receivable (売掛金) 90,000, Merchandise (商品) 60,000 / Cr Sales (売上) 90,000, Cost of goods sold (売上原価) 60,000
AnswerC. Dr Accounts receivable (売掛金) 90,000, Cost of goods sold (売上原価) 60,000 / Cr Sales (売上) 90,000, Merchandise (商品) 60,000

Under this method, a sale records Sales at the selling price and, at the same time, moves the cost out of Merchandise into Cost of goods sold. Recording only Sales is the three-account method. The entry splitting Merchandise and Sales by the difference does not record Sales at the selling price. Reversing Merchandise and Cost of goods sold increases Merchandise and decreases COGS (that is the direction used for a return).

Q5 | Advances received

Using the three-account method, the company delivered goods worth ¥300,000 for which it had earlier received a ¥30,000 deposit with the order. The balance after deducting the deposit is on credit. Which journal entry is correct?

  1. Dr Advances received (前受金) 30,000, Accounts receivable (売掛金) 270,000 / Cr Sales (売上) 300,000
  2. Dr Advances paid (前払金) 30,000, Accounts receivable (売掛金) 270,000 / Cr Sales (売上) 300,000
  3. Dr Accounts receivable (売掛金) 300,000 / Cr Sales (売上) 270,000, Advances received (前受金) 30,000
  4. Dr Accounts receivable (売掛金) 330,000 / Cr Sales (売上) 300,000, Advances received (前受金) 30,000
AnswerA. Dr Advances received (前受金) 30,000, Accounts receivable (売掛金) 270,000 / Cr Sales (売上) 300,000

The deposit was recorded as Advances received (前受金), a liability. On delivery, the ¥30,000 is cleared, the remaining ¥270,000 becomes Accounts receivable, and Sales of ¥300,000 is recorded. Advances paid (前払金) is used by the buyer who paid a deposit. Recording Sales of ¥270,000 understates sales, and crediting Advances received increases it further. The ¥330,000 receivable entry also increases Advances received, so it is wrong.

Q6 | Credit card receivable

Using the three-account method, the company sold goods for ¥100,000 paid by credit card. The card company's fee (4% of the sale) is recorded at the time of sale. Which journal entry is correct?

  1. Dr Accounts receivable (売掛金) 96,000, Commission expense (支払手数料) 4,000 / Cr Sales (売上) 100,000
  2. Dr Credit card receivable (クレジット売掛金) 96,000, Commission expense (支払手数料) 4,000 / Cr Sales (売上) 100,000
  3. Dr Credit card receivable (クレジット売掛金) 100,000 / Cr Sales (売上) 100,000
  4. Dr Credit card receivable (クレジット売掛金) 100,000 / Cr Sales (売上) 96,000, Commission expense (支払手数料) 4,000
AnswerB. Dr Credit card receivable (クレジット売掛金) 96,000, Commission expense (支払手数料) 4,000 / Cr Sales (売上) 100,000

Card payments are collected from the card company, so they are recorded as Credit card receivable (クレジット売掛金), separate from customers' Accounts receivable. The fee is 100,000 × 4% = 4,000; since it is recorded at sale, Commission expense is debited and the receivable is ¥96,000. Using Accounts receivable is the wrong account. Ignoring the fee goes against the instruction. Crediting the fee treats it like revenue instead of an expense.

Q7 | Gift certificates and consumption tax

Using the three-account method and the tax-excluded method (consumption tax 10%), the company sold goods for ¥50,000 (before tax). Of the payment, ¥33,000 was received in gift certificates issued by a local government and the rest in cash. Which journal entry is correct?

  1. Dr Gift certificates received (受取商品券) 33,000, Cash (現金) 22,000 / Cr Sales (売上) 55,000
  2. Dr Gift certificates received (受取商品券) 33,000, Cash (現金) 22,000 / Cr Sales (売上) 50,000, Consumption tax paid (仮払消費税) 5,000
  3. Dr Accounts receivable (売掛金) 33,000, Cash (現金) 22,000 / Cr Sales (売上) 50,000, Consumption tax received (仮受消費税) 5,000
  4. Dr Gift certificates received (受取商品券) 33,000, Cash (現金) 22,000 / Cr Sales (売上) 50,000, Consumption tax received (仮受消費税) 5,000
AnswerD. Dr Gift certificates received (受取商品券) 33,000, Cash (現金) 22,000 / Cr Sales (売上) 50,000, Consumption tax received (仮受消費税) 5,000

The tax-included price is 50,000 + 5,000 = 55,000, received as ¥33,000 in certificates and ¥22,000 in cash. Certificates issued by another body are recorded as Gift certificates received (受取商品券), an asset. Under the tax-excluded method, Sales is ¥50,000 and the tax received is Consumption tax received (仮受消費税), a liability. Sales of ¥55,000 is the tax-included style. Consumption tax paid (仮払消費税) is for tax paid on purchases. Gift certificates are not Accounts receivable.

Q8 | Gross profit

The company uses the three-account method. From the following data, find gross profit for the year: opening inventory ¥40,000, gross purchases ¥510,000, purchase returns ¥10,000, closing inventory ¥50,000, net sales ¥700,000.

  1. ¥200,000
  2. ¥190,000
  3. ¥210,000
  4. ¥160,000
AnswerC. ¥210,000

Net purchases are 510,000 − 10,000 = 500,000. Cost of goods sold = opening 40,000 + net purchases 500,000 − closing 50,000 = 490,000. Gross profit = 700,000 − 490,000 = ¥210,000. ¥200,000 forgets to deduct purchase returns (COGS 500,000), ¥190,000 swaps opening and closing inventory (COGS 510,000), and ¥160,000 forgets to deduct closing inventory (COGS 540,000).

Q9 | FIFO cost of goods sold

Transactions in product X for April were: Apr 1 brought forward 10 units @¥1,000; Apr 8 purchase 30 units @¥1,200; Apr 15 sale 25 units; Apr 22 purchase 20 units @¥1,290; Apr 28 sale 30 units. Using first-in, first-out (先入先出法) in the inventory ledger (商品有高帳), what is April's cost of goods sold?

  1. ¥65,350
  2. ¥65,650
  3. ¥68,700
  4. ¥64,000
AnswerA. ¥65,350

FIFO issues the oldest units first. The 25 units on Apr 15 are 10 × 1,000 = 10,000 plus 15 × 1,200 = 18,000, total 28,000. The 30 units on Apr 28 are the remaining 15 × 1,200 = 18,000 plus 15 × 1,290 = 19,350, total 37,350. The sum is ¥65,350. ¥65,650 is the moving-average result. ¥68,700 wrongly costs each issue at the most recent purchase price (25 units at 1,200 on Apr 15 and 30 units at 1,290 on Apr 28), and ¥64,000 wrongly costs all 30 units at 1,200 although only 15 units at that price were left.

Q10 | Moving-average gross profit

Transactions in product X for April were: Apr 1 brought forward 10 units @¥1,000; Apr 8 purchase 30 units @¥1,200; Apr 15 sale 25 units; Apr 22 purchase 20 units @¥1,290; Apr 28 sale 30 units. Every sale was at ¥2,000 per unit. Using the moving-average method (移動平均法) in the inventory ledger (商品有高帳), what is April's gross profit?

  1. ¥44,650
  2. ¥44,350
  3. ¥46,750
  4. ¥42,550
AnswerB. ¥44,350

After Apr 8 the average cost is (10,000 + 36,000) ÷ 40 = 1,150. The Apr 15 issue is 25 × 1,150 = 28,750, leaving 15 units worth 17,250. After Apr 22 the average is (17,250 + 25,800) ÷ 35 = 1,230. The Apr 28 issue is 30 × 1,230 = 36,900. COGS is 65,650 and sales are 55 × 2,000 = 110,000, so gross profit is ¥44,350. ¥44,650 is the FIFO result. ¥46,750 comes from not recalculating the average after Apr 22 (keeping 1,150), and ¥42,550 from costing the Apr 28 issue at the latest purchase price of 1,290.

Q11 | Perpetual method: Merchandise balance

The company records merchandise using the method of transferring cost to Cost of goods sold at each sale. The Merchandise account had an opening balance of ¥30,000; goods bought on credit during the year were ¥400,000; the cost of goods sold during the year was ¥360,000. In addition, goods costing ¥6,000 from those sold were returned because the wrong item was sent. What is the closing balance of the Merchandise account?

  1. ¥70,000
  2. ¥64,000
  3. ¥46,000
  4. ¥76,000
AnswerD. ¥76,000

Merchandise increases with purchases (debit), decreases by cost at each sale (credit), and increases by the cost of returned goods on a sales return (Dr Merchandise / Cr Cost of goods sold). 30,000 + 400,000 − 360,000 + 6,000 = ¥76,000. ¥70,000 forgets the return, ¥64,000 subtracts the return instead of adding it, and ¥46,000 leaves out the opening balance.

Q12 | Net purchases in the purchases journal

The May purchases journal (仕入帳) shows: May 3, Shop A, on credit, item Ko 50 units @¥800, ¥40,000. May 10, Shop B, on credit, item Otsu 30 units @¥1,000, ¥30,000, plus freight-in (borne by the company) paid in cash ¥1,500, total ¥31,500. May 12, Shop B, return on credit, item Otsu 3 units @¥1,000, ¥3,000 (entered in red). When the journal is closed, what is the net purchases amount?

  1. ¥71,500
  2. ¥67,000
  3. ¥68,500
  4. ¥65,500
AnswerC. ¥68,500

Gross purchases are 40,000 + 31,500 = 71,500 (freight-in borne by the buyer is part of cost). Subtracting returns of 3,000 gives net purchases of ¥68,500. ¥71,500 is gross purchases without the return deducted. ¥67,000 leaves the freight out of purchases, and ¥65,500 subtracts the freight as if it were a return.

Q13 | Net sales in the sales journal

June transactions: June 5, sold item Ko 40 units @¥1,500 to Shop C on credit. June 12, sold item Otsu 20 units @¥2,000 to Shop D on credit and paid shipping of ¥1,000 (borne by the company) in cash. June 14, Shop D returned 2 units of Otsu because the wrong item was sent (deducted from the receivable). When the sales journal (売上帳) is closed, what is net sales?

  1. ¥100,000
  2. ¥96,000
  3. ¥97,000
  4. ¥95,000
AnswerB. ¥96,000

Gross sales are 60,000 + 40,000 = 100,000. Sales returns are 2 × 2,000 = 4,000, so net sales are ¥96,000. Shipping borne by the seller is Shipping expense (発送費), not sales, so it is not included in the sales journal. ¥100,000 is gross sales without the return, ¥97,000 adds the shipping to sales, and ¥95,000 subtracts it from sales.

Q14 | Issues column of the inventory ledger

The inventory ledger (商品有高帳, FIFO) for product Y shows: May 1 brought forward 20 units @¥500 ¥10,000; May 9 purchase 30 units @¥520 ¥15,600. On May 20, 25 units were sold. Which is the correct entry in the issues column for May 20?

  1. Two lines: 20 units @¥500 ¥10,000 and 5 units @¥520 ¥2,600
  2. One line: 25 units @¥512 ¥12,800
  3. One line: 25 units @¥520 ¥13,000
  4. Two lines: 5 units @¥500 ¥2,500 and 20 units @¥520 ¥10,400
AnswerA. Two lines: 20 units @¥500 ¥10,000 and 5 units @¥520 ¥2,600

Under FIFO, the 20 units brought forward (@¥500) are issued first, and the remaining 5 units come from the May 9 purchase (@¥520). Because the unit costs differ, they are written on two lines. ¥512 is the moving-average unit cost (25,600 ÷ 50). Costing all 25 units at ¥520 issues the newest units first, and 5 units @500 with 20 units @520 swaps the quantities.

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