Exam 7: Reporting and Interpreting Cost of Goods Sold and Inventory

Only large companies need to be concerned with a system of internal control.

Which of the following accounts is always treated as a contra revenue and not as a selling expense?

Red Company received the following October 31, 20C, bank statement: The cash account reflected the following for October: The September 30 bank reconciliation showed: Deposits in transit, $3,000, and outstanding cheques, $500. Required: A. What was the amount of the deposits in transit at October 31? B. What was the amount of outstanding cheques at October 31? C. Prepare a bank reconciliation for October. Use the following format: D. Give the journal entries that should be made by Red Company based on the bank reconciliation.

When completing a bank reconciliation, bank service charges should be added to the cash balance appearing on the bank statement.

Western Company sold $4,000 of goods to Southern Company on credit on May 1. At the time of the sale, Western recorded a debit to Trade Receivables and a credit to Sales Revenue for $4,000. Terms were 2/10, n/30. Required: Present the entries Western would record for each of the following independent situations: A. Southern paid the balance due, less the discount, on May 10. B. Southern returned half of the goods for credit on May 4. Paid the balance due, less the discount, on May 10. C. Southern paid their bill on May 30 (there were no returns).

Calculate the gross profit ratio for all three years: a. 2012 ________ b. 2011 ________ c. 2010 ________

Under the allowance method for uncollectible accounts, the entry to write off an uncollectible account only involves statement of financial position accounts.

In 2013, A Co. reported product sales revenue of $2,514.4 million and trade receivables of $319.9 million for 2013 and $269.0 million in 2012. What was the cash flow generated by sales?

On a multiple-step income statement, what happens to the amount of sales returns and allowances?

If a cheque correctly written and paid by the bank for $521 is incorrectly recorded on the company's books for $251, the appropriate treatment on the bank reconciliation would be to

On July 10, 20B, Mighty Company sold merchandise at an invoice price of $5,000 with terms of 3/10, n/30. Give the journal entries required below by indicating the account code of the appropriate account for each debit and credit and the amounts involved. A Cash B Trade Receivables C Sales Revenue D Sales Discounts

A portion of the statement of earnings for Sun Company is shown below. Provide the missing account titles and amounts.

Following the completion of an aging analysis, the accountant for Liberty estimated that $1,100 of the receivables would be uncollectible. The year-end adjusting entry to record bad debt expense would include which of the following?

The sales returns and allowances account should be reported as a deduction from sales revenue because it is a contra revenue account.

Sales revenue is measured as the market value of the consideration received, or the book value of the item sold, whichever is more reliable.

The Allowance for Doubtful Accounts is a liability account.

In 2013, G CO. reported product sales of $717.8 million and trade receivables of $79.4 million. In 2012, product sales were $584.9 million and trade receivables were $71.4 million. What was its receivables turnover ratio for 2013?

A credit sale of $2,500, terms 1/20, n/30, should be recorded with which of the following journal entries?

Under the allowance method for uncollectible accounts, bad debts expense is recorded when an individual customer defaults.

MP Co.'s gross profit percentage decreased from 59.2% in 2012 to 58.3% in 2013. This means that MP Co.'s cost of goods sold as a percentage of sales has decreased.