Question 1

The profit margin ratio indicates the total dollars of profit from gross sales.

Accepted Answer

A) True 
 B)False  False

Question 2

Revenues result in an increase in assets or a decrease in liabilities.

Accepted Answer

A) True 
 B)False  True

Question 3

The difference between a perpetual inventory system and a periodic inventory system is:

Accepted Answer

A)  periodic will record the cost of goods sold amount at the sale. 
B)  perpetual requires a physical inventory count. 
C)  periodic will record inventory purchases in the inventory account. 
D)  periodic will adjust inventory at the end of each period with a physical count. 
A)  periodic will record the cost of goods sold amount at the sale. 
B)  perpetual requires a physical inventory count. 
C)  periodic will record inventory purchases in the inventory account. 
D)  periodic will adjust inventory at the end of each period with a physical count. D

Question 4

How is the gross profit percentage calculated, and what does it signify?

Accepted Answer

The answer of How is the gross profit percentage calculated,...

Question 5

A business using a perpetual inventory system will always have up-to-date inventory and cost of goods sold accounts.

Accepted Answer

A) True 
 B)False

Question 6

A ___________ ________is a business document listing the information for a sales return or allowance.

Accepted Answer

The answer of A ___________ ________is a business document listing...

Question 7

Asset, liability and owner's capital accounts are called __________________ ________ because they are used for the life of the business to record the effects of its transactions on its balance sheet.

Accepted Answer

The answer of Asset, liability and owner's capital accounts are...

Question 8

Expenses result in a decrease in assets or an increase in liabilities.

Accepted Answer

A) True 
 B)False

Question 9

Example 7.2
The information below is used for the following problems.
Jones & Company had:
 $\begin{array}{lr}
\text { Net sales } & 500000 \
\text { Gross profit } & 290000 \
\text { Operating profit } & 150000 \
\text { Net income } & 85000
\end{array}$

-Refer to Example 7.2. Jones & Company's Gross Profit Percentage is:

Accepted Answer

A)  17%. 
B)  30%. 
C)  58%. 
D)  11% 
A)  17%. 
B)  30%. 
C)  58%. 
D)  11%

Question 10

________________ __________ are used for one accounting period to record the effects of a business' transactions on its net income.

Accepted Answer

The answer of ________________ __________ are used for one accounting...

Question 11

Operating capability refers to a business' ability to continue a given level of operations.

Accepted Answer

A) True 
 B)False

Question 12

The ____________________ is calculated by dividing net income by net sales.

Accepted Answer

The answer of The ____________________ is calculated by dividing net...

Question 13

Closing entries are entries made by a business to transfer the ending balances from its ___________________revenue and expense accounts into its permanent account for owner's capital.

Accepted Answer

The answer of Closing entries are entries made by a...

Question 14

A quantity discount is a reduction in the ___________ ________of a good or service because the number of items purchased or because of a sales promotion.

Accepted Answer

The answer of A quantity discount is a reduction in...

Question 15

The income statement's key role is to communicate ____________________ - ____________________ = ____________________ to decision users.

Accepted Answer

The answer of The income statement's key role is to...

Question 16

Permanent accounts refer to assets, liabilities and owner's equity as they are used for the life of the business.

Accepted Answer

A) True 
 B)False

Question 17

The income statement's key role is to communicate assets - liabilities = net income to users.

Accepted Answer

A) True 
 B)False

Question 18

What is financial flexibility and why is it important?

Accepted Answer

The answer of What is financial flexibility and why is...

Question 19

What is the purpose of undertaking ratio analysis?

Accepted Answer

The answer of What is the purpose of undertaking ratio...

Question 20

Expenses are the costs of providing goods and services and result in decreases in ____________________ or increases in ______________.

Accepted Answer

The answer of Expenses are the costs of providing goods...

The profit margin ratio indicates the total dollars of profit from gross sales.

Revenues result in an increase in assets or a decrease in liabilities.

The difference between a perpetual inventory system and a periodic inventory system is:

How is the gross profit percentage calculated, and what does it signify?

A business using a perpetual inventory system will always have up-to-date inventory and cost of goods sold accounts.

A ___ is a business document listing the information for a sales return or allowance.

Asset, liability and owner's capital accounts are called __________ because they are used for the life of the business to record the effects of its transactions on its balance sheet.

Expenses result in a decrease in assets or an increase in liabilities.

Example 7.2 The information below is used for the following problems. Jones & Company had: Net sales 500000 Gross profit 290000 Operating profit 150000 Net income 85000 -Refer to Example 7.2. Jones & Company's Gross Profit Percentage is:

______ are used for one accounting period to record the effects of a business' transactions on its net income.

Operating capability refers to a business' ability to continue a given level of operations.

The ____________________ is calculated by dividing net income by net sales.

Closing entries are entries made by a business to transfer the ending balances from its ___________________revenue and expense accounts into its permanent account for owner's capital.

A quantity discount is a reduction in the ___ of a good or service because the number of items purchased or because of a sales promotion.

The income statement's key role is to communicate - = to decision users.

Permanent accounts refer to assets, liabilities and owner's equity as they are used for the life of the business.

The income statement's key role is to communicate assets - liabilities = net income to users.

What is financial flexibility and why is it important?

What is the purpose of undertaking ratio analysis?

Expenses are the costs of providing goods and services and result in decreases in ______ or increases in .

Introduction to Business Accounting and the Role of Professional Skills

Developing a Business Plan: Cost-Volume-Profit Analysis

Developing a Business Plan: Budgeting

The Accounting System: Concepts and Applications

Recording, Storing and Reporting Accounting Information

Managing and Reporting Working Capital

The Balance Sheet: Content, Use and Analysis

The Cash Flow Statement: Content and Use

Sustainable Business

Short-Term Planning Decisions

Capital Expenditure Decisions

Filters

Exam 7: The Income Statement: Content and Use

The profit margin ratio indicates the total dollars of profit from gross sales.

Revenues result in an increase in assets or a decrease in liabilities.

The difference between a perpetual inventory system and a periodic inventory system is:

How is the gross profit percentage calculated, and what does it signify?

A business using a perpetual inventory system will always have up-to-date inventory and cost of goods sold accounts.

A ___________ ________is a business document listing the information for a sales return or allowance.

Asset, liability and owner's capital accounts are called __________________ ________ because they are used for the life of the business to record the effects of its transactions on its balance sheet.

Expenses result in a decrease in assets or an increase in liabilities.

Example 7.2 The information below is used for the following problems. Jones & Company had: Net sales 500000 Gross profit 290000 Operating profit 150000 Net income 85000 -Refer to Example 7.2. Jones & Company's Gross Profit Percentage is:

________________ __________ are used for one accounting period to record the effects of a business' transactions on its net income.

Operating capability refers to a business' ability to continue a given level of operations.

The ____________________ is calculated by dividing net income by net sales.

Closing entries are entries made by a business to transfer the ending balances from its ___________________revenue and expense accounts into its permanent account for owner's capital.

A quantity discount is a reduction in the ___________ ________of a good or service because the number of items purchased or because of a sales promotion.

The income statement's key role is to communicate ____________________ - ____________________ = ____________________ to decision users.

Permanent accounts refer to assets, liabilities and owner's equity as they are used for the life of the business.

The income statement's key role is to communicate assets - liabilities = net income to users.

What is financial flexibility and why is it important?

What is the purpose of undertaking ratio analysis?

Expenses are the costs of providing goods and services and result in decreases in ____________________ or increases in ______________.

Introduction to Business Accounting and the Role of Professional Skills

Developing a Business Plan: Cost-Volume-Profit Analysis

Developing a Business Plan: Budgeting

The Accounting System: Concepts and Applications

Recording, Storing and Reporting Accounting Information

Managing and Reporting Working Capital

The Balance Sheet: Content, Use and Analysis

The Cash Flow Statement: Content and Use

Sustainable Business

Short-Term Planning Decisions

Capital Expenditure Decisions

Filters

A ___ is a business document listing the information for a sales return or allowance.

Asset, liability and owner's capital accounts are called __________ because they are used for the life of the business to record the effects of its transactions on its balance sheet.

______ are used for one accounting period to record the effects of a business' transactions on its net income.

A quantity discount is a reduction in the ___ of a good or service because the number of items purchased or because of a sales promotion.

The income statement's key role is to communicate - = to decision users.

Expenses are the costs of providing goods and services and result in decreases in ______ or increases in .