4 Written questions
3 Matching questions
- Stine Company purchased merchandise with an invoice price of $2,000 and credit terms of 1/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms?
- In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.
- In a perpetual inventory system, the Cost of Goods Sold account is used
A. only when a cash sale of merchandise occurs.
B. only when a credit sale of merchandise occurs.
C. only when a sale of merchandise occurs.
D. whenever there is a sale of merchandise or a return of merchandise sold.
- a C
- b D
- c TRUE
5 Multiple choice questions
5 True/False questions
If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000, cost of goods sold is
D. $420,000. → B
Gross profit is
A. Sales revenue less Operating expenses.
B. Sales revenue less Cost of goods sold.
C. Net income less Operating expenses.
D. Net income less Cost of goods sold. → B
All of the following items would be reported as Other revenues and gains except
A. Gain on Sale of Equipment.
B. Interest Revenue.
C. Rent Revenue.
D. Sales Revenue. → D
A multiple-step income statement distinguishes between operating and non-operating activities.
B. False → D
Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.
B. False → B