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5 Written questions

4 Matching questions

  1. Net income is Gross profit less
    A. Administrative expenses.
    B. Operating expenses.
    C. Other expenses and losses.
    D. Selling expenses.
  2. 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
    A. $980.
    B. $20.
    C. $1,176.
    D. $1,000.
  3. 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.
  4. A merchandiser using a perpetual system will require one additional adjusting entry to make the records agree with the actual inventory on hand.
    A. True
    B. False
  1. a D
  2. b TRUE
  3. c A
  4. d B

5 Multiple choice questions

  1. C
  2. C
  3. B
  4. A
  5. B

5 True/False questions

  1. 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

          

  2. A perpetual inventory system would more likely be used by a (n)
    A. automobile dealership.
    B. hardware store.
    C. drugstore.
    D. convenience store.
    A

          

  3. In a periodic inventory system, a return of defective merchandise to a supplier is recorded by crediting
    A. Accounts Payable.
    B. Inventory.
    C. Purchases.
    D. Purchase Returns and Allowances.
    D

          

  4. 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
    A. $159,200.
    B. $169,200.
    C. $162,800.
    D. $153,200.
    D

          

  5. A multiple-step income statement distinguishes between operating and non-operating activities.
    A. True
    B. False
    D

          

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