5 Written questions
4 Matching questions
- There are more steps involved in preparing a worksheet for a merchandising company than for a service company.
- Company A purchases $1,200 of merchandise from Company B on July 1 with credit terms 2/10, n/30. Company A returns $200 of the merchandise on July 5. On July 11, Company B received full payment from Company A. The amount of the payment on July 11 is
- Which of the following accounts may be found in the adjustment columns of a worksheet for a merchandiser but not a service company?
A. Prepaid Insurance
B. Accumulated Depreciation
C. Cost of Goods Sold
D. Salaries and Wages Expense
- Which of the following expressions is incorrect?
A. Gross profit less Operating expenses equals Net income.
B. Sales less Cost of goods sold less Operating expenses equals Net income.
C. Net income plus Operating expenses equals Gross profit.
D. Operating expenses less Cost of goods sold equals Gross profit.
- a D
- b C
- c A
- d FALSE
5 Multiple choice questions
5 True/False questions
Which of the following appears on both a single-step and a multiple-step income statement?
B. Gross profit.
C. Income from operations.
D. Cost of goods sold. → D
In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.
B. False → TRUE
Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.
B. False → TRUE
The following amounts relate to Amato Company for the current year: Beginning Inventory, $20,000; Ending Inventory, $28,000; Purchases, $166,000; Purchase Returns, $4,800; and Freight-Out, $6,000. The amount of Cost of Goods Sold for the period is
D. $153,200. → C
To record the sale of goods for cash in a perpetual inventory system
A. only one journal entry is necessary to record cost of goods sold and reduction of inventory.
B. only one journal entry is necessary to record the receipt of cash and the sales revenue.
C. two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory.
D. two journal entries are necessary: one to record the receipt of cash and reduction of inventory, and one to record the cost of goods sold and sales revenue. → B