Chapter 4 AC 200 Chen Song

Merchandise inventory consists of products that a company acquires to resell to customers.T/F

A company had net sales of $545,000 and cost of goods sold of $345,000, which means its gross margin is equal to $200,000. T/F

Cost of goods sold is reported on both the income statement and the balance sheet.

The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.T/ F

Cost of goods sold: A. Is another term for merchandise sales. B. Is the cost of merchandise sold to customers. C. Is another term for revenue. D. Is also called gross margin. E. Is a term only used by service firms.

A company had sales of $375,000 and gross profit of $157,500. Its cost of goods sold was: A. $(217,000) B. $375,000 C. $157,500 D. $217,500 E. $532,500

The current period's ending inventory is: A. The next period's beginning inventory. B. The current period's cost of goods sold. C. The prior period's beginning inventory. D. The current period's net purchases. E. The current period's beginning inventory.

Beginning inventory plus net cost of purchases is: A. Cost of goods sold. B. Merchandise available for sale. C. Ending inventory. D. Sales. Shown on the balance sheet.

The credit terms 2/10, n/30 are interpreted as: A. 2% cash discount if the amount is paid within 10 days, with the balance due in 30 days. B. 10% cash discount if the amount is paid within 2 days, with balance due in 30 days. C. 30% discount if paid within 2 days. D. 30% discount if paid within 10 days. E. 2% discount if paid within 30 days.

Herald Company had sales of $135,000, sales discounts of $2,000 and sales returns of $3,200. Herald Company's net sales equals: A. $5,200 B. $129,800 C. $133,000 D. $135,000 E. $140,200

xpenses that support the overall operations of a business and include the expenses relating to accounting, human resource management, and financial management are called: A. Cost of goods sold. B. Selling expenses. C. Purchasing expenses. D. General and administrative expenses. E. Nonoperating activities.

Alpha Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Alpha's net sales for this period equal: A. $94,275 B. $172,550 C. $174,250 D. $176,025 E. $177,725