Question 1

Under IFRS, companies must classify income statement items by

Accepted Answer

A)  function. 
B)  nature. 
C)  nature or function 
D)  date incurred. 
A)  function. 
B)  nature. 
C)  nature or function 
D)  date incurred.

Question 2

In a single-step income only one step is required in determining net income.

Accepted Answer

A) True 
 B)False

Question 3

Which statement is incorrect?

Accepted Answer

A)  Periodic inventory systems provide better control over inventories than perpetual inventory systems. 
B)  Computers and electronic scanners allow more companies to use a perpetual inventory system. 
C)  Freight-in is debited to Inventory when a perpetual inventory system is used. 
D)  Regardless of the inventory system that is used, companies should take a physical inventory count. 
A)  Periodic inventory systems provide better control over inventories than perpetual inventory systems. 
B)  Computers and electronic scanners allow more companies to use a perpetual inventory system. 
C)  Freight-in is debited to Inventory when a perpetual inventory system is used. 
D)  Regardless of the inventory system that is used, companies should take a physical inventory count.

Question 4

On September 4, Roberta's Knickknacks buys merchandise on account from Dolan Company. The selling price of the goods is $900 and the cost of goods is $600. Both companies use the perpetual inventory systems Journalize the transactions on the books of both companies.

Accepted Answer

Roberta's

Question 5

A credit sale of $1,900 is made on April 25, terms 2/10, net/30, on which a return of $100 is granted on April 28. What amount is received as payment in full on May 4?

Accepted Answer

A)  $1,764 
B)  $1,862 
C)  $1,900 d $1,800 
A)  $1,764 
B)  $1,862 
C)  $1,900 d $1,800

Question 6

Sales revenue less cost of goods sold is called

Accepted Answer

A)  gross profit. 
B)  net profit. 
C)  net income. 
D)  marginal income. 
A)  gross profit. 
B)  net profit. 
C)  net income. 
D)  marginal income.

Question 7

The collection of a $700 account beyond the 2 percent discount period will result in a

Accepted Answer

A)  debit to Cash for $686. 
B)  credit to Accounts Receivable for $700. 
C)  credit to Cash for $700. 
D)  debit to Sales Discounts for $14. 
A)  debit to Cash for $686. 
B)  credit to Accounts Receivable for $700. 
C)  credit to Cash for $700. 
D)  debit to Sales Discounts for $14.

Question 8

The amount of cost of good available for sale during the year depends on the amounts of

Accepted Answer

A)  beginning merchandise inventory and cost of goods sold. 
B)  beginning merchandise inventory, net cost of purchases, and ending merchandise inventory. 
C)  beginning merchandise inventory, cost of goods sold, and ending merchandise inventory. 
D)  beginning merchandise inventory and net costs of purchases. 
A)  beginning merchandise inventory and cost of goods sold. 
B)  beginning merchandise inventory, net cost of purchases, and ending merchandise inventory. 
C)  beginning merchandise inventory, cost of goods sold, and ending merchandise inventory. 
D)  beginning merchandise inventory and net costs of purchases.

Question 9

Under IFRS, companies can choose which inventory system? Perpetual Periodic

Accepted Answer

A)  Yes No 
B)  Yes Yes 
C)  No Yes 
D)  Yes No. 
A)  Yes No 
B)  Yes Yes 
C)  No Yes 
D)  Yes No.

Question 10

Casin Company sells $700 of merchandise on account to Delta Exploration with credit terms of 2/10, n/30. If Delta Exploration remits a check taking advantage of the discount offered, what is the amount of Delta Exploration's check?

Accepted Answer

A)  $490 
B)  $686 
C)  $630 
D)  $560 
A)  $490 
B)  $686 
C)  $630 
D)  $560

Question 11

Which of the following provides the best rationale regarding analysts' views about the information value of the gross profit rate versus the gross profit amount?

Accepted Answer

A)  The gross profit amount is more informative than the gross profit rate because it is a dollar amount rather than a ratio. 
B)  The gross profit amount is less informative than the gross profit rate because the latter presents a meaningful relationship between gross profit and net sales. 
C)  The gross profit amount is more informative than the gross profit rate because the gross profit rate is only used to describe a few industries while the gross profit amount is universally used. 
D)  The gross profit amount is more informative than the gross profit rate because high volume operations are able to calculate the gross profit rate but not the gross profit amount. 
A)  The gross profit amount is more informative than the gross profit rate because it is a dollar amount rather than a ratio. 
B)  The gross profit amount is less informative than the gross profit rate because the latter presents a meaningful relationship between gross profit and net sales. 
C)  The gross profit amount is more informative than the gross profit rate because the gross profit rate is only used to describe a few industries while the gross profit amount is universally used. 
D)  The gross profit amount is more informative than the gross profit rate because high volume operations are able to calculate the gross profit rate but not the gross profit amount.

Question 12

The entry to record the return of goods from a customer would include a

Accepted Answer

A)  debit to Sales Revenue. 
B)  credit to Sales Revenue. 
C)  debit to Sales Returns and Allowances. 
D)  credit to Sales Returns and Allowances. 
A)  debit to Sales Revenue. 
B)  credit to Sales Revenue. 
C)  debit to Sales Returns and Allowances. 
D)  credit to Sales Returns and Allowances.

Question 13

Inventory becomes part of cost of goods sold when a company

Accepted Answer

A)  pays for the inventory. 
B)  purchases the inventory. 
C)  sells the inventory. 
D)  receives payment from the customer. 
A)  pays for the inventory. 
B)  purchases the inventory. 
C)  sells the inventory. 
D)  receives payment from the customer.

Under IFRS, companies must classify income statement items by

In a single-step income only one step is required in determining net income.

Which statement is incorrect?

On September 4, Roberta's Knickknacks buys merchandise on account from Dolan Company. The selling price of the goods is $900 and the cost of goods is $600. Both companies use the perpetual inventory systems Journalize the transactions on the books of both companies.

A credit sale of $1,900 is made on April 25, terms 2/10, net/30, on which a return of $100 is granted on April 28. What amount is received as payment in full on May 4?

Sales revenue less cost of goods sold is called

The collection of a $700 account beyond the 2 percent discount period will result in a

The amount of cost of good available for sale during the year depends on the amounts of

Under IFRS, companies can choose which inventory system? Perpetual Periodic

Casin Company sells $700 of merchandise on account to Delta Exploration with credit terms of 2/10, n/30. If Delta Exploration remits a check taking advantage of the discount offered, what is the amount of Delta Exploration's check?

Which of the following provides the best rationale regarding analysts' views about the information value of the gross profit rate versus the gross profit amount?

The entry to record the return of goods from a customer would include a

Inventory becomes part of cost of goods sold when a company

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

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Exam 5: Merchandising Operations and the Multiple-Step Income Statement

Under IFRS, companies must classify income statement items by

In a single-step income only one step is required in determining net income.

Which statement is incorrect?

On September 4, Roberta's Knickknacks buys merchandise on account from Dolan Company. The selling price of the goods is $900 and the cost of goods is $600. Both companies use the perpetual inventory systems Journalize the transactions on the books of both companies.

A credit sale of $1,900 is made on April 25, terms 2/10, net/30, on which a return of $100 is granted on April 28. What amount is received as payment in full on May 4?

Sales revenue less cost of goods sold is called

The collection of a $700 account beyond the 2 percent discount period will result in a

The amount of cost of good available for sale during the year depends on the amounts of

Under IFRS, companies can choose which inventory system? Perpetual Periodic

Casin Company sells $700 of merchandise on account to Delta Exploration with credit terms of 2/10, n/30. If Delta Exploration remits a check taking advantage of the discount offered, what is the amount of Delta Exploration's check?

Which of the following provides the best rationale regarding analysts' views about the information value of the gross profit rate versus the gross profit amount?

The entry to record the return of goods from a customer would include a

Inventory becomes part of cost of goods sold when a company

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters