Question 1

Use the following information to answer questions 
  
-What was the cost of goods purchased?

Accepted Answer

A) $220,200 
B) $218,700 
C) $221,000 
D) $216,400 
A) $220,200 
B) $218,700 
C) $221,000 
D) $216,400

Question 2

Under a perpetual inventory system

Accepted Answer

A) there is no need for a year-end physical count. 
B) increases in inventory resulting from purchases are debited to Purchases. 
C) accounting records continuously disclose the amount of inventory. 
D) the account Purchase Returns and Allowances is credited when goods are returned to vendors. 
A) there is no need for a year-end physical count. 
B) increases in inventory resulting from purchases are debited to Purchases. 
C) accounting records continuously disclose the amount of inventory. 
D) the account Purchase Returns and Allowances is credited when goods are returned to vendors.

Question 3

Which of the following is not true about a multiple-step statement of income?

Accepted Answer

A) There is a section for operating expenses. 
B) There may be a section for non-operating activities. 
C) There may be a section for operating assets. 
D) There is a section for cost of goods sold. 
A) There is a section for operating expenses. 
B) There may be a section for non-operating activities. 
C) There may be a section for operating assets. 
D) There is a section for cost of goods sold.

Question 4

Which statement is correct about expenses on the statement of income?

Accepted Answer

A) Classifying expenses by nature means that expenses are reported according to the activity for which they are incurred. 
B) Examples of expenses classified by function are cost of goods sold and administrative expenses. 
C) Expenses must be classified by their function. 
D) Expenses must be classified in decreasing order of magnitude. 
A) Classifying expenses by nature means that expenses are reported according to the activity for which they are incurred. 
B) Examples of expenses classified by function are cost of goods sold and administrative expenses. 
C) Expenses must be classified by their function. 
D) Expenses must be classified in decreasing order of magnitude.

Question 5

Net income will result if gross profit exceeds

Accepted Answer

A) cost of goods sold. 
B) operating expenses. 
C) purchases. 
D) cost of goods sold plus operating expenses. 
A) cost of goods sold. 
B) operating expenses. 
C) purchases. 
D) cost of goods sold plus operating expenses.

Question 6

The respective normal balances of Purchases, Purchase Discounts, and Freight In are

Accepted Answer

A) credit, credit, debit. 
B) debit, credit, credit. 
C) debit, credit, debit. 
D) debit, debit, debit. 
A) credit, credit, debit. 
B) debit, credit, credit. 
C) debit, credit, debit. 
D) debit, debit, debit.

Question 7

Use the following financial information to answer questions 
  
-What is the profit margin?

Accepted Answer

A) 22.7% 
B) 20.6% 
C) 27.3% 
D) 50.0% 
A) 22.7% 
B) 20.6% 
C) 27.3% 
D) 50.0%

Question 8

Use the following information to answer questions 
  
-Gross profit would be

Accepted Answer

A) $598,000. 
B) $666,000. 
C) $756,000. 
D) $254,800. 
A) $598,000. 
B) $666,000. 
C) $756,000. 
D) $254,800.

Question 9

Under a periodic inventory system, purchase of merchandise is debited to the

Accepted Answer

A) Inventory account. 
B) Cost of Goods Sold account. 
C) Purchases account. 
D) Accounts Payable account. 
A) Inventory account. 
B) Cost of Goods Sold account. 
C) Purchases account. 
D) Accounts Payable account.

Question 10

Which one of the following would not appear on a single-step statement of income?

Accepted Answer

A) gross profit 
B) expenses 
C) sales revenues 
D) cost of goods sold 
A) gross profit 
B) expenses 
C) sales revenues 
D) cost of goods sold

Question 11

Under a periodic inventory system,

Accepted Answer

A) purchases of inventory are debited to the Purchases account. 
B) freight incurred on merchandise purchases by the buyer should be debited to the Inventory account. 
C) purchases of merchandise are usually credited to the Purchases account. 
D) freight incurred on merchandise sales by the seller should be debited to the Freight In account. 
A) purchases of inventory are debited to the Purchases account. 
B) freight incurred on merchandise purchases by the buyer should be debited to the Inventory account. 
C) purchases of merchandise are usually credited to the Purchases account. 
D) freight incurred on merchandise sales by the seller should be debited to the Freight In account.

Question 12

A company can improve its profit margin by

Accepted Answer

A) decreasing its gross profit margin. 
B) controlling its operating and other expenses 
C) experiencing an increase in the income tax rate. 
D) earning other expenses. 
A) decreasing its gross profit margin. 
B) controlling its operating and other expenses 
C) experiencing an increase in the income tax rate. 
D) earning other expenses.

Question 13

A multiple-step statement of income shows

Accepted Answer

A) gross profit but not income from operations. 
B) neither gross profit nor income from operations. 
C) both gross profit and income from operations. 
D) income from operations but not gross profit. 
A) gross profit but not income from operations. 
B) neither gross profit nor income from operations. 
C) both gross profit and income from operations. 
D) income from operations but not gross profit.

Question 14

Market Inc.shows the following account balances for last month:   The cost of goods purchased for last month is

Accepted Answer

A) $33,820. 
B) $36,245. 
C) $32,495. 
D) $33,500. 
A) $33,820. 
B) $36,245. 
C) $32,495. 
D) $33,500.

Question 15

An advantage of the single-step statement of income over the multiple-step form is

Accepted Answer

A) the amount of information it provides. 
B) its comprehensiveness. 
C) its simplicity. 
D) its use in calculating ratios. 
A) the amount of information it provides. 
B) its comprehensiveness. 
C) its simplicity. 
D) its use in calculating ratios.

Question 16

Which of the following is not true for a company using a periodic inventory system?

Accepted Answer

A) Cost of goods sold is calculated for each sale. 
B) Cost of goods sold is calculated at the end of the accounting period. 
C) A physical inventory count is performed at the end of the accounting period. 
D) Cost of goods available for sale is calculated at the end of the accounting period. 
A) Cost of goods sold is calculated for each sale. 
B) Cost of goods sold is calculated at the end of the accounting period. 
C) A physical inventory count is performed at the end of the accounting period. 
D) Cost of goods available for sale is calculated at the end of the accounting period.

Question 17

Non-operating activities include revenues and expenses that are related to the company's main operations.

Accepted Answer

A) True 
 B)False

Question 18

An asset account, Estimated Inventory Returns, is used to record the cost of the goods expected to be returned.

Accepted Answer

A) True 
 B)False

Question 19

On the statement of income, the beginning inventory is added to the cost of goods purchased to determine the

Accepted Answer

A) cost of goods sold. 
B) cost of goods available for sale. 
C) income from operations. 
D) gross profit. 
A) cost of goods sold. 
B) cost of goods available for sale. 
C) income from operations. 
D) gross profit.

Question 20

A sales invoice is prepared when goods

Accepted Answer

A) are sold for cash. 
B) are sold on credit. 
C) sold on credit are returned. 
D) are sold on credit or for cash. 
A) are sold for cash. 
B) are sold on credit. 
C) sold on credit are returned. 
D) are sold on credit or for cash.

Use the following information to answer questions -What was the cost of goods purchased?

Under a perpetual inventory system

Which of the following is not true about a multiple-step statement of income?

Which statement is correct about expenses on the statement of income?

Net income will result if gross profit exceeds

The respective normal balances of Purchases, Purchase Discounts, and Freight In are

Use the following financial information to answer questions -What is the profit margin?

Use the following information to answer questions -Gross profit would be

Under a periodic inventory system, purchase of merchandise is debited to the

Which one of the following would not appear on a single-step statement of income?

Under a periodic inventory system,

A company can improve its profit margin by

A multiple-step statement of income shows

Market Inc.shows the following account balances for last month: The cost of goods purchased for last month is

An advantage of the single-step statement of income over the multiple-step form is

Which of the following is not true for a company using a periodic inventory system?

Non-operating activities include revenues and expenses that are related to the company's main operations.

An asset account, Estimated Inventory Returns, is used to record the cost of the goods expected to be returned.

On the statement of income, the beginning inventory is added to the cost of goods purchased to determine the

A sales invoice is prepared when goods

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 5: Merchandising Operations

Use the following information to answer questions -What was the cost of goods purchased?

Under a perpetual inventory system

Which of the following is not true about a multiple-step statement of income?

Which statement is correct about expenses on the statement of income?

Net income will result if gross profit exceeds

The respective normal balances of Purchases, Purchase Discounts, and Freight In are

Use the following financial information to answer questions -What is the profit margin?

Use the following information to answer questions -Gross profit would be

Under a periodic inventory system, purchase of merchandise is debited to the

Which one of the following would not appear on a single-step statement of income?

Under a periodic inventory system,

A company can improve its profit margin by

A multiple-step statement of income shows

Market Inc.shows the following account balances for last month: The cost of goods purchased for last month is

An advantage of the single-step statement of income over the multiple-step form is

Which of the following is not true for a company using a periodic inventory system?

Non-operating activities include revenues and expenses that are related to the company's main operations.

An asset account, Estimated Inventory Returns, is used to record the cost of the goods expected to be returned.

On the statement of income, the beginning inventory is added to the cost of goods purchased to determine the

A sales invoice is prepared when goods

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters