5 Written questions
5 Matching 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
- A single-step income statement
A. reports Gross profit.
B. does not report Cost of goods sold.
C. reports Sales revenues and Other revenues and gains in the revenues section of the income statement.
D. reports Income from operations separately.
- 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.
- Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.
- FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.
- a B
- b TRUE
- c D
- d C
- e A
5 Multiple choice questions
5 True/False questions
Income from operations appears on
A. both a multiple-step and a single-step income statement.
B. neither a multiple-step nor a single-step income statement.
C. a multiple-step income statement only.
D. a single-step income statement only. → C
Baden Shoe Store has a beginning merchandise inventory of $15,000. During the period, purchases were $70,000; purchase returns, $2,000, and freight-in $5,000. A physical count of inventory at the end of the period revealed that $10,000 was still on hand. The cost of goods available for sale was
D. $92,000 → C
In determining Cost of goods sold
A. Purchase Discounts are deducted from Net Purchases
B. Freight-out is added to Net Purchases.
C. Purchase Returns and Allowances are deducted from Net Purchases.
D. Freight-in is added to Net Purchases. → B
There are more steps involved in preparing a worksheet for a merchandising company than for a service company.
B. False → A
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. → D