5 Written Questions
2 Matching Questions
- 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.
- Under a perpetual inventory system, which of the following is not part of the journal entries made when merchandise is sold on credit?
A. credit the Cost of Goods Sold account.
B. credit the Sales Revenue account.
C. credit the Inventory account.
D. debit the Accounts Receivable account.
- a A
- b D
5 Multiple Choice Questions
5 True/False Questions
Indicate which one of the following would appear on the income statement of both a merchandiser and a service enterprise.
A. Gross profit
B. Operating expenses
C. Sales revenue
D. Cost of goods sold → C
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
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. → C
Which of the following accounts is not closed to Income Summary?
A. Cost of Goods Sold.
C. Sales Revenue.
D. Sales Discounts. → C
A company that maintains a perpetual inventory system has an inventory account balance of $50,000. The physical count of goods on hand totals $49,600. Which of the following adjusting entries is correct?
A. debit Purchases and credit Inventory.
B. debit Cost of Goods Sold and credit Inventory.
C. debit Inventory and credit Purchases.
D. debit Sales Discounts and credit Inventory. → C