Exam 4: Merchandising Operations and the Multiple-Step Income Statement

Financial information is presented below: Operating expenses \ 42,000 Sales returns and allowances 12,000 Sales discounts 3,000 Sales revenue 165,000 Cost of goods sold 96,000 The amount of net sales on the income statement would be

Under the periodic inventory system, cost of goods sold is treated as an account.

The operating expenses section of an income statement for a merchandising company would not include

Under a perpetual inventory system, acquisition of merchandise for resale is debited to

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.

Assets purchased for resale are recorded in which of the following accounts?

If Hostell Company has net sales of $500,000 and cost of goods sold of $350,000, Hostell's gross profit rate is

The credit terms offered to a customer by a business firm were 2/10, n/30, which means

During the year, Sarah's Pet Shop's merchandise inventory decreased by $50,000. If the company's cost of goods sold for the year was $750,000, purchases would have been

Gross profit rate is computed by dividing cost of goods sold by net sales.

A perpetual inventory system would most likely be used by a(n)

operating expenses.

Income from operations appears on both the single-step and multiple-step forms of an income statement.

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

The Sales Returns and Allowances account is classified as a(n)

Which of the following accounts is classified as a contra revenue account?

The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.

What is a difference between merchandising companies and service enterprises?

Operating expenses would include

Which of the following is a true statement about inventory systems?