Question 1

Income from operations will always result if

Accepted Answer

A) the cost of goods sold exceeds operating expenses. 
B) revenues exceed cost of goods sold. 
C) revenues exceed operating expenses. 
D) gross profit exceeds operating expenses. 
A) the cost of goods sold exceeds operating expenses. 
B) revenues exceed cost of goods sold. 
C) revenues exceed operating expenses. 
D) gross profit exceeds operating expenses.

Question 2

Net sales is sales less sales returns and allowances and sales discounts.

Accepted Answer

A) True 
 B)False

Question 3

The operating expense section of an income statement for a wholesaler would not include

Accepted Answer

A) freight-out. 
B) utilities expense. 
C) cost of goods sold. 
D) insurance expense. 
A) freight-out. 
B) utilities expense. 
C) cost of goods sold. 
D) insurance expense.

Question 4

During August, 2011, Joe's Supply Store generated revenues of $60,000.The company's expenses were as follows: cost of goods sold of $24,000 and operating expenses of $4,000.The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000. Joe's other income and expense (loss) for the month of August, 2011 is

Accepted Answer

A) $0. 
B) $1,000. 
C) $2,000. 
D) $3,000. 
A) $0. 
B) $1,000. 
C) $2,000. 
D) $3,000.

Question 5

Cost of goods sold is determined only at the end of the accounting period in

Accepted Answer

A) a perpetual inventory system. 
B) a periodic inventory system. 
C) both a perpetual and a periodic inventory system. 
D) neither a perpetual nor a periodic inventory system. 
A) a perpetual inventory system. 
B) a periodic inventory system. 
C) both a perpetual and a periodic inventory system. 
D) neither a perpetual nor a periodic inventory system.

Question 6

If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $240,000, the gross profit rate is

Accepted Answer

A) 62%. 
B) 60% 
C) 40%. 
D) 38%. 
A) 62%. 
B) 60% 
C) 40%. 
D) 38%.

Question 7

Under International Financial Reporting Standards (IFRS) when operating expenses are presented by nature additional disclosures are required regarding the function of certain expenses.

Accepted Answer

A) True 
 B)False

Question 8

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are undertaking a project to rework the structure of financial statements.The proposed structure will adopt the major groupings used on the statement of financial position: current and non-current assets and liabilities, followed by equity.

Accepted Answer

A) True 
 B)False

Question 9

Maxwell Company's financial information is presented below.
 
The missing amounts above are

Accepted Answer

The answer of Maxwell Company's financial information is presented below.
...

Question 10

Sales of $2,500 subject to terms 2/10, net 30 could end up being reported on the statement of financial position as an account receivable at an amount greater than $2,500 if the discount isn't taken by the buyer.

Accepted Answer

A) True 
 B)False

Question 11

Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods are recorded in

Accepted Answer

A) Freight Expense 
B) Freight - In 
C) Merchandise Inventory 
D) Freight - Out 
A) Freight Expense 
B) Freight - In 
C) Merchandise Inventory 
D) Freight - Out

Question 12

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

Accepted Answer

A) Merchandise Inventory. 
B) Purchase Discounts. 
C) Purchase Allowance. 
D) Sales Discounts. 
A) Merchandise Inventory. 
B) Purchase Discounts. 
C) Purchase Allowance. 
D) Sales Discounts.

Question 13

187

Accepted Answer

a.€30,000

Question 14

199

Accepted Answer

The answer of 199  ...

Question 15

Other income and expense excludes revenues and expenses that are unrelated to the company's main line of operations.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?

Accepted Answer

A) Cash received on account with a discount 
B) Payment of freight costs on a purchase 
C) Return of merchandise sold 
D) Sale of merchandise on credit 
A) Cash received on account with a discount 
B) Payment of freight costs on a purchase 
C) Return of merchandise sold 
D) Sale of merchandise on credit

Question 17

A merchandising company has different types of adjusting entries than a service company.

Accepted Answer

A) True 
 B)False

Question 18

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

Accepted Answer

A) Merchandise Inventory account will be increased. 
B) Merchandise Inventory account will not be affected. 
C) seller will bear the freight cost. 
D) carrier will bear the freight cost. 
A) Merchandise Inventory account will be increased. 
B) Merchandise Inventory account will not be affected. 
C) seller will bear the freight cost. 
D) carrier will bear the freight cost.

Question 19

Financial information is presented below:   The gross profit rate would be

Accepted Answer

A) .535. 
B) .489. 
C) .511. 
D) .553. 
A) .535. 
B) .489. 
C) .511. 
D) .553.

Question 20

If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is 25%.

Accepted Answer

A) True 
 B)False

Income from operations will always result if

Net sales is sales less sales returns and allowances and sales discounts.

The operating expense section of an income statement for a wholesaler would not include

Cost of goods sold is determined only at the end of the accounting period in

If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $240,000, the gross profit rate is

Under International Financial Reporting Standards (IFRS) when operating expenses are presented by nature additional disclosures are required regarding the function of certain expenses.

Maxwell Company's financial information is presented below. The missing amounts above are

Sales of $2,500 subject to terms 2/10, net 30 could end up being reported on the statement of financial position as an account receivable at an amount greater than $2,500 if the discount isn't taken by the buyer.

Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods are recorded in

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

187

199

Other income and expense excludes revenues and expenses that are unrelated to the company's main line of operations.

Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?

A merchandising company has different types of adjusting entries than a service company.

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

Financial information is presented below: The gross profit rate would be

If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is 25%.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters

Exam 5: Accounting for Merchandising Operations

Income from operations will always result if

Net sales is sales less sales returns and allowances and sales discounts.

The operating expense section of an income statement for a wholesaler would not include

Cost of goods sold is determined only at the end of the accounting period in

If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $240,000, the gross profit rate is

Under International Financial Reporting Standards (IFRS) when operating expenses are presented by nature additional disclosures are required regarding the function of certain expenses.

Maxwell Company's financial information is presented below. The missing amounts above are

Sales of $2,500 subject to terms 2/10, net 30 could end up being reported on the statement of financial position as an account receivable at an amount greater than $2,500 if the discount isn't taken by the buyer.

Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods are recorded in

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to

187

199

Other income and expense excludes revenues and expenses that are unrelated to the company's main line of operations.

Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?

A merchandising company has different types of adjusting entries than a service company.

If a purchaser using a perpetual system agrees to freight terms of FOB shipping point, then the

Financial information is presented below: The gross profit rate would be

If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is 25%.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters