4 Written questions
3 Matching questions
- Gross profit will result if
A. operating expenses are less than net income.
B. sales revenues are greater than operating expenses.
C. sales revenues are greater than cost of goods sold.
D. operating expenses are greater than cost of goods sold.
- 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.
- 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 B
- b D
- c C
5 Multiple choice questions
5 True/False questions
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. → False
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. → C
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 → C
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
D. $1,000. → C
If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000, cost of goods sold is
D. $420,000. → B