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5 Written questions

4 Matching questions

  1. Operating expenses include all of the following except
    A. advertising expense.
    B. freight-out.
    C. insurance expense.
    D. interest expense.
  2. In a periodic inventory system, companies keep detailed inventory records of the goods on hand throughout the period.
    A. True
    B. False
  3. 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
  4. Which of the following appears on both the income statements of merchandising and service companies?
    A. Cost of goods sold.
    B. Gross profit.
    C. Operating expenses.
    D. Sales revenue.
  1. a False
  2. b D
  3. c TRUE
  4. d C

5 Multiple choice questions

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

5 True/False questions

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


  2. 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.


  3. Sales revenue less cost of goods sold is called net profit.
    A. True
    B. False


  4. FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.
    A. True
    B. False


  5. Which of the following accounts is not closed to Income Summary?
    A. Cost of Goods Sold.
    B. Inventory.
    C. Sales Revenue.
    D. Sales Discounts.


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