accounting chpt 5

Merchandising companies that sell to retailers are known as brokers. service firms. wholesalers. corporations.

Which of the following would not be considered a merchandising operation? Merchandising company Service firm Retailer Wholesaler

Which of the following companies would be most likely to use a perpetual inventory system? Clothing store Beauty salon Grain company Fur dealer

Gross profit equals the difference between sales revenue and operating expenses. sales revenue and cost of goods sold. sales revenue and cost of goods sold plus operating expenses. net income and operating expenses.

Net income will result if gross profit exceeds cost of goods sold. operating expenses. purchases. cost of goods sold plus operating expenses.

A merchandiser will earn an operating income of exactly $0 when gross profit equals operating expenses. operating expenses equal net sales. cost of goods sold equals gross margin. net sales equals cost of goods sold.

Which of the following accounts is classified as a contra revenue account? Sales Returns and Allowances Sales Revenue Purchase Discounts Cost of Goods Sold

Sales revenues are usually considered earned when adjusting entries are made. an order is received. goods have been transferred from the seller to the buyer. cash is received from credit sales.

The journal entry to record a credit sale ignoring cost of goods sold is Cash Service Revenue Accounts Receivable Sales Returns and Allowances Cash Sales Revenue Accounts Receivable Sales Revenue

When Costco records returned merchandise, and the product is in good condition it should debit cash and credit sales returns and allowances. credit cash and debit sales returns and allowances. debit sales returns and allowances and credit inventory. credit cash and debit accounts receivable.

As the president of Harter Company, you notice that no discounts have been taken when settling accounts payables. What would be an acceptable explanation? The full amount of the invoice is being paid within the discount period and the treasurer is pocketing the discount amount. All invoices have credit terms of n/30. Discounts are missed because no one knows how to enter them in the new accounting software. There is not sufficient cash to pay within the discount period.

When using a perpetual inventory system, why are discounts credited to Inventory? The discounts are debited to discount expense and thus the credit has to be made to merchandise inventory. The discounts reduce the cost of the inventory. The discounts are a reduction of business expenses. None of these answers choices are correct.

Sheridan's Market used the perpetual method to record the following events involving a recent purchase of inventory: Received goods for $ 77000, terms 2/ 13, n/30. Returned $ 1200 of the shipment for credit. Paid $ 600 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory increased by $ 74884. increased by $ 74284. increased by $ 74872. increased by $ 76400.

Gross profit does not appear on either a multiple-step or single-step income statement. on a multiple-step income statement. to be relevant in analyzing the operation of a merchandising company. on a single-step income statement.

Gross profit equals the difference between net sales and cost of goods sold. net income. cost of goods sold plus operating expenses. operating expenses.

Positive operating income will result if gross profit exceeds salaries and wages expense. costs of goods sold. operating expenses. cost of goods sold plus operating expenses.

What is the term applied to the excess of net sales over the cost of goods sold? Gross profit Income from operations Net income Income before income taxes

Income from operations is gross profit less 1. operating expenses and other expenses and losses. 2. operating expenses plus other revenues and gains. 3. operating expenses. 1 2 3 both 1 and 2

Financial information is presented below: Operating expenses $ 50000 Sales revenue 214000 Cost of goods sold 131000 The gross profit rate would be 0.39. 0.61. 0.15. 0.23.

Financial information is presented below: Operating expenses $ 27000 Sales revenue 235000 Cost of goods sold 161000 The profit margin ratio would be 0.31. 0.69. 0.80. 0.20.

Financial information is presented below: Operating expenses $ 30000 Sales revenue 187000 Cost of goods sold 153000 The profit margin ratio would be 0.82. 0.02. 0.98. 0.18.

At the beginning of the year, Grouper had an inventory of $ 740000. During the year, the company purchased goods costing $ 2060000. If Grouper reported ending inventory of $ 730000 and sales of $ 3160000, their cost of goods sold and gross profit rate would be $ 1830000 and 34%. $ 1090000 and 66%. $ 2070000 and 34.49%. $ 1330000 and 65.51%.

Gross profit equals the difference between

net income will result if gross profit exceeds

in a perpetual inventory system, cost of goods sold is recorded

A company using perpetual inventory system that returns goods previously purchased on credit would debit: credit: