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ACCT101 chapter 4
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- SAFe 5.1 Questions And Answers 2024
Exam of 11 pages for the course SAFe 5.1 Questions and Answers 2024 at SAFe 5.1 Questions and Answers 2024 (ACCT101 chapter 4)
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ACCT101 chapter 4Each of the following are examples of a merchandising company except: -
CORRECT ANSWER-Michael's lawn mowing
Gross profit is: - CORRECT ANSWER-equal to net sales less cost of goods sold
A company reports net sales of $600,000, cost of goods sold of $200,000, and
net income of $100,000. Its gross profit equals: - CORRECT ANSWER-$400,000
Merchandise inventory includes: - CORRECT ANSWER-- costs to purchase
- shipping costs
- costs to prepare for sale
Place the operating cycle for a merchandiser in the correct order. - CORRECT
ANSWER-1. credit sales - item"c"
2. receipt of cash from credit sales - item "e"
3. cash purchase of merchandise - item"a"
4. account receivable - item"d"
5. inventory for sale - item"b"
The company's cost of goods sold equals: - CORRECT ANSWER-$21,000
The company's cost of goods available for sale equals: - CORRECT
ANSWER-$34,000
a perpetual inventory system updates the accounting records____ - CORRECT
ANSWER-for each purchase and each sale
a periodic inventory system updates the accounting records____ - CORRECT
ANSWER-at the end of the period
Credit terms of "2/10, n/60" means: - CORRECT ANSWER-the company will
receive a 2 percent discount if paid within 10 days
The company's total cost of merchandise purchases equals: - CORRECT
ANSWER-$91,000
, Which of the following statements is correct regarding the adjusting entries for a
merchandiser versus a service company. - CORRECT ANSWER-- a service
company will have an adjusting entry for accrued expenses
- a merchandising company will have an adjusting entry for accrued expenses
- a service company will have an adjusting entry for unearned revenues.
- a merchandising company will have an adjusting entry for unearned revenues
Which of the following statements is correct regarding inventory shrinkage? -
CORRECT ANSWER-- shrinkage refers to the loss of inventory
- shrinkage can be caused by theft or deterioration
- shrinkage is computed by comparing a physical count of inventory with the
recorded amount
- shrinkage is recorded by debiting cost of goods sold
Which statement is correct regarding the closing process of a merchandiser? -
CORRECT ANSWER-both the sales discounts and the sales returns and
allowances accounts are credited during the closing process
Which of the following totals and subtotals are not found on a multiple-step
income statement? - CORRECT ANSWER-total current assets
A single-step income statement: - CORRECT ANSWER-reports the same
amount of net income as that reported on a multiple- step income statement
When a classified balance sheet is prepared, merchandise inventory is: -
CORRECT ANSWER-reported as a current asset
To compute net income for a merchandiser, you will start with net sales, subtract
cost of goods sold and subtract other ______ - CORRECT ANSWER-expenses
Select all that apply
Cost of goods sold is characterized by which of the following statements? (Check
all that apply.) - CORRECT ANSWER-- cost of goods sold is an expense
reported on the income statement.
- cost of goods sold is also called cost of sales.
- cost of goods sold is used to figure gross profit
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