Term
| Which of the following statements about a periodic inventory system is true? |
|
Definition
(a)
Companies determine cost of goods sold only at the end of the accounting period. |
|
|
Term
| Which of the following items does not result in an adjustment in the merchandise inventory account under a perpetual system? |
|
Definition
(c)
Payment of freight costs for goods shipped to a customer. |
|
|
Term
| Which sales accounts normally have a debit balance? |
|
Definition
(a)
Sales discounts.
(b)
Sales returns and allowances.
(c)
Both (a) and (b).
Answer is C |
|
|
Term
| A company makes a credit sale of $750 on June 13, terms 2/10, n/30, on which it grants a return of $50 on June 16. What amount is received as payment in full on June 23? |
|
Definition
|
|
Term
| To record the sale of goods for cash in a perpetual inventory system: |
|
Definition
(c)
two journal entries are necessary: one to record the receipt of cash and sales revenue, and one to record the cost of goods sold and reduction of inventory. |
|
|
Term
| Gross profit will result if: |
|
Definition
(c)
sales revenues are greater than cost of goods sold. |
|
|
Term
| If sales revenues are $400,000, cost of goods sold is $310,000, and operating expenses are $60,000, what is the gross profit? |
|
Definition
|
|
Term
| The income statement for a merchandising company shows each of these features except: |
|
Definition
(a)
gross profit.
(b)
cost of goods sold.
(c)
a sales revenue section.
(d)
All of these are present.
Answer is D |
|
|
Term
| If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000, what is cost of goods sold under a periodic system? |
|
Definition
|
|
Term
| Arbor Corporation had reported the following amounts at December 31, 2010: Sales $184,000; ending inventory $11,600; beginning inventory $17,200; purchases $60,400; purchase discounts $3,000; purchase returns and allowances $1,100; freight-in $600; freight-out $900. Calculate the cost of goods available for sale. |
|
Definition
|
|
Term
| Which of the following would affect the gross profit rate? (Assume sales remains constant.) |
|
Definition
(c)
An increase in cost of goods sold. |
|
|
Term
| The gross profit rate is equal to: |
|
Definition
(c)
net sales minus cost of goods sold, divided by net sales. |
|
|
Term
| During the year ended December 31, 2010, State Street Corporation had the following results: Sales $267,000; cost of good sold $107,000; net income $92,400; operating expenses $55,400; net cash provided by operating activities $108,950. What was the company's profit margin ratio? |
|
Definition
|
|
Term
| A quality of earnings ratio: |
|
Definition
(b)
that is less than 1 indicates that a company might be using aggressive accounting tactics. |
|
|
Term
| When goods are purchased for resale by a company using a periodic inventory system: |
|
Definition
(b)
purchases on account are debited to Purchases. |
|
|
