5 Written questions
3 Matching questions
- 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.
- 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?
- 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.
- a B
- b C
- c D
5 Multiple choice questions
5 True/False 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. → D
In a perpetual inventory system, which of the following would be debited when goods are purchased with the intent of being resold?
A. Cost of Goods Sold.
D. Accounts Payable. → 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
Net income is Gross profit less
A. Administrative expenses.
B. Operating expenses.
C. Other expenses and losses.
D. Selling expenses. → B
Income from operations is
A. Net sales less Cost of goods sold.
B. Net sales less Operating expenses.
C. Gross profit less Other expenses and losses.
D. Gross profit less Operating expenses. → D