4 Written questions
3 Matching questions
- With respect to the income statement,
A. contra-revenue accounts do not appear on the income statement.
B. sales discounts increase the amount of sales.
C. contra-revenue accounts increase the amount of operating expenses.
D. sales discounts are included in the calculation of gross profit.
- Which of the following accounts may be found in the adjustment columns of a worksheet for a merchandiser but not a service company?
A. Prepaid Insurance
B. Accumulated Depreciation
C. Cost of Goods Sold
D. Salaries and Wages Expense
- A company has the following account balances: Sale Revenue, $1,000,000; Sales Returns and Allowances, $180,000; Sales Discounts, $20,000; and Cost of Goods Sold, $600,000. What is the company's gross profit rate?
- a D
- b B
- c C
5 Multiple choice questions
5 True/False questions
Sales revenue less cost of goods sold is called net profit.
B. False → B
The steps in the accounting cycle for a merchandising company are the same as those in a service company except
A. an additional adjusting journal entry for inventory may be needed in a merchandising company.
B. closing journal entries are not required for a merchandising company.
C. a post-closing trial balance is not required for a merchandising company.
D. a multiple-step income statement is required for a merchandising company. → D
Which of the following accounts will appear in the trial balance of a merchandising company but not a service company?
A. Salaries Expense.
C. Accumulated Depreciation.
D. Dividends. → B
FOB shipping point means that the
A. goods are placed free on board to the buyer's place of business.
B. buyer pays the freight.
C. seller pays the freight.
D. common carrier pays the freight. → B
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