5 Written questions
4 Matching questions
- Operating expenses include all of the following except
A. advertising expense.
C. insurance expense.
D. interest expense.
- In a periodic inventory system, companies keep detailed inventory records of the goods on hand throughout the period.
- A merchandiser using a perpetual system will require one additional adjusting entry to make the records agree with the actual inventory on hand.
- 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 False
- b D
- c TRUE
- d C
5 Multiple choice questions
5 True/False questions
A multiple-step income statement distinguishes between operating and non-operating activities.
B. False → D
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. → A
Sales revenue less cost of goods sold is called net profit.
B. False → B
FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.
B. False → A
Which of the following accounts is not closed to Income Summary?
A. Cost of Goods Sold.
C. Sales Revenue.
D. Sales Discounts. → C