Net sales revenue is
calculated by _______.
A.
subtracting sales discounts and estimated sales returns
and allowances from sales revenue
B.
subtracting cost of
goods sold from sales revenue
C.
adding sales discounts
and sales returns and allowances to sales revenue
D.
subtracting sales
discounts and selling expenses from sales revenue
Which of the following
is shown on a multi-step income statement but not on a single-step
income statement?
A.
gross profit
B.
net income
C.
cost of goods sold
D.
net sales revenue
On a multi-step income statement, which of the following is added to
operating income to arrive at net income?
A.
sales revenue
B.
interest expense
C.
sales discounts forfeited
D.
operating expenses
On a multi-step income statement, the operating expenses are subtracted from ________ to arrive at
operating income.
A.
net profit
B.
gross profit
C.
net sales
D.
cost of goods sold
Which of the following is
subtracted from net sales revenue to arrive at gross profit on a multi-step income statement?
A.
selling expense
B.
cost of goods sold
C.
sales discounts
D.
all of the above
The following
information relates to Blake Auto Supply.
|
Net Sales Revenue
|
$191,000
|
|
Cost of Goods Sold
|
150,000
|
|
Interest Revenue
|
12,000
|
|
Operating Expenses
|
40,000
|
Calculate the net income
of Blake Auto Supply.
A.
$220,000
B.
$64,000
C.
$13,000
D.
$1,000
Landon Jewelers uses the
perpetual inventory system. On April 2,
Landon sold merchandise with a cost of $1,500 for $7,000
to a customer on account with terms of 1/15, n/30. The journal entry to record the cost of
goods sold would be:
A.
|
Cost of Goods Sold
|
1,500
|
|
|
Accounts
Receivable
|
1,500
|
B.
|
Cost of Goods Sold
|
1,500
|
|
|
Merchandise Inventory
|
1,500
|
C.
|
Merchandise Inventory
|
1,500
|
|
|
Cost of Goods
Sold
|
1,500
|
D.
|
Sales Revenue
|
1,500
|
|
|
Cost of Goods
Sold
|
1,500
|
Sales are recorded at the
amount of the sale less any sales discounts.
True
False
A
company sold merchandise with a cost of $217 for $420 on
account. The seller uses the perpetual inventory system. The entry to record
the cost of merchandise sold would include ________.
A.
a debit to Cost of Goods
Sold and a credit to Merchandise Inventory for $ 217
B.
a debit to Merchandise
Inventory for $217 and a credit to Cost of Goods Sold for $ 217
C.
a debit to Sales Revenue
and a credit to Cash for $ 420
D.
a debit to Cash and a
credit to Sales Revenue for $ 420
Under the perpetual inventory system, two journal entries
are used to record the sale of merchandise. One entry records the Sales Revenue
and another entry records the Cost of Goods Sold.
True
False
When a company uses the
perpetual inventory system _________.
A.
the purchase of
merchandise inventory on account is recorded as a debit to Accounts Payable and
a credit to Merchandise Inventory.
B.
purchases of Office
Supplies and Equipment that will be used in the day−to−day operations of the business are recorded as debits to
Merchandise Inventory.
C.
the Merchandise
Inventory account is reported as an expense on the income statement.
D.
the Merchandise Inventory account is debited for purchases
of goods that the company intends to resell to customers.
The Merchandise Inventory
account is an expense account that is used for goods purchased that the business
owns and intends to resell to customers,
as well as for purchases of office supplies and equipment.
True
False
An invoice is a purchaser's request for
payment from the seller.
True
False
In a periodic inventory system, the Cost of Goods
Sold account is continuously updated as and when sales occur.
True
False
The largest expense of a
merchandiser is usually ________.
A.
cost of goods sold
B.
selling and
administrative expenses
C.
merchandise inventory
D.
purchasing expense
Which of the following line
items will appear on the income statement of a merchandiser but not of a service company?
A.
Cost of Goods Sold
B.
Depreciation Expense
C.
Supplies Inventory
D.
Salaries Expense
The operating cycle of a
merchandiser begins when the company purchases inventory from a vendor and ends
when the company then sells the inventory to a customer.
True
False
For a merchandiser,
the term "inventory" refers to ________.
A.
goods held for sale to customers
B.
the cost of goods sold
C.
raw materials that are
used for production
D.
equipment that are used in production process
A retailer can buy
merchandise either from a manufacturer or a wholesaler.
True
False
Refer to the following
trial balance.
|
Debit
|
Credit
|
|
|
Cash
|
$15,000
|
|
|
Accounts Receivable
|
43,000
|
|
|
Merchandise Inventory
|
50,000
|
|
|
Supplies
|
16,000
|
|
|
Land
|
300,000
|
|
|
Accounts Payable
|
$5,000
|
|
|
Notes Payable
|
24,000
|
|
|
Kim, Capital
|
331,000
|
|
|
Kim, Withdrawals
|
6,000
|
|
|
Sales Revenue
|
444,000
|
|
|
Cost of Goods Sold
|
230,000
|
|
|
Salaries Expense
|
17,000
|
|
|
Utilities Expense
|
67,000
|
|
|
Rent Expense
|
55,000
|
|
|
Interest Expense
|
5,000
|
|
|
Totals
|
$804,000
|
$804,000
|
How much is the gross profit?
.
A.
$214,000
B.$70,000
C.$64,000
D.$ 75,000
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