5 Written questions
4 Matching questions
- Net income is Gross profit less
A. Administrative expenses.
B. Operating expenses.
C. Other expenses and losses.
D. Selling expenses.
- 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
- 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 merchandiser using a perpetual system will require one additional adjusting entry to make the records agree with the actual inventory on hand.
- a D
- b TRUE
- c A
- d B
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. → B
A perpetual inventory system would more likely be used by a (n)
A. automobile dealership.
B. hardware store.
D. convenience store. → A
In a periodic inventory system, a return of defective merchandise to a supplier is recorded by crediting
A. Accounts Payable.
D. Purchase Returns and Allowances. → D
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
A multiple-step income statement distinguishes between operating and non-operating activities.
B. False → D