Exam 6: Internal Control and Financial Reporting for Cash and Merchandising Operations

During its first month of operations,Purrfect Pets purchased 6,000 bags of dog food at a cost of $5 a bag and sold all 6,000 bags of dog food on account with payment terms of 3/10,net 30 for $10 each.A total of 2,600 of these bags were sold to customers who paid within the discount period; the other customers paid after the discount period had ended.Sales allowances totaling $200 were granted to customers whose dogs did not like the dog food. Required: Part a.Calculate the gross profit for the month. Part b.Calculate the gross profit percentage for the month.

Which of the following is the equation for cost of goods sold?

On December 31,2014,you count 300 tie clips in inventory.During the next quarter,you carefully record the effect of each purchase and sale transaction on inventory.You buy 128 tie clips during the next quarter.On March 31,2015,you count 288 tie clips in inventory.Which of the following is not correct?

Which of the following statements about gross profit is correct?

Cost of goods sold reports the:

Inventory began with $30,000.During the period the company purchased $61,000 of merchandise.At the end of the period,inventory was $22,000.If the gross profit percentage was 40%,what was sales revenue?

The following is a listing of some of the balance sheet accounts and all of the income statement accounts for Aldine Inc.as they appear on the company's adjusted trial balance. -Use the information above to answer the following question.Income from operations would be:

The gross profit equation is:

Inventory cost consists of purchase price:

A company reported the following: -Use the above information to answer the following question.What is the amount of gross profit?

Berkley Company had beginning inventory of $4,000 and purchases of $20,000.If half of its inventory was sold,Berkley's goods available for sale will:

McLeod Corporation is a merchandising company.The year began with inventory of $27,000,Purchases for the year were $52,000,and the Ending Inventory was $14,000.What is the Cost of Goods Sold that would be reported on the income statement?

Use the information above to answer the following question.What journal entry will be prepared by Darin Company on October 8 to record the receipt of payment from Dee?

The receipt of cash is one of the operating activities of:

Why is inventory reported as a current asset?

Which of the following statements about gross profit percentages is correct?

Because it is an expense account,the Sales Returns & Allowances account balance is deducted from the Sales Revenue account balance in determining net sales.

Assuming that all else is equal,which of the following companies is most profitable?

When inventory is sold,the cost of the inventory is removed from inventory and reported on a multistep the income statement as:

If a company achieves a small increase in its gross profit percentage from one year to the next,the company: