Exam 6: Merchandising Operations and the Multistep Income Statement

The gross profit percentage for Elk Roofing Products is 20%.If the company has Net Sales of $850,000 for the year,what was the amount of Cost of Goods Sold?

The gross profit equation is:

Match the term to the appropriate definition.There are more definitions than terms. -Sales Discount

Alpha Company bought inventory from Omega Company,FOB shipping point.On December 31,the last day of the accounting year,the goods were on a truck owned by Theta,Inc. ,exactly halfway between Alpha and Omega.Which company should include these goods in its December 31 inventory?

Intel makes microchips from raw materials acquired from suppliers.Intel is a:

The journal entry to record taking a discount when paying for goods previously purchased on account includes a:

The gross profit percentage is an indication of how:

Hazelwood Company had beginning inventory of $54,000.During the period the company purchased $109,800 of merchandise.At the end of the period,Hazelwood's inventory was $39,600.If the gross profit percentage was 40%,what was Hazelwood's sales revenue?

Which of the following statements regarding inventory counts is not correct?

The periodic inventory system uses the Inventory account to keep track of the amount of inventory that is purchased.

In a retail business that uses a perpetual inventory system,scanning a bar code does not:

The periodic inventory system uses the Purchases account to keep track of the amount of inventory that is purchased.

FAD Company uses a periodic inventory system and its inventory records for the period contain the following information: The journal entry necessary at the end of the period to transfer beginning inventory and net purchases to cost of goods sold will include which of the following?

Which of the following costs should be added to the buyer's Inventory account?

Medlock Company sold inventory on credit for $3,000,terms 2/10,n/30.The cost of the merchandise to Medlock was $2,400.How much cash will Medlock receive if payment is received within the discount period?

Glenrosa Company bought inventory from Monterosa Company,FOB destination.On December 31,the last day of the accounting year,the goods were on a truck owned by Common Carrier,Inc. ,and not expected to arrive until January 2.Which company should include these goods in its December 31 inventory?

Which inventory system records a change in the Inventory account every time goods are bought,sold or returned?

Which of the following statements is incorrect regarding sales discounts?

On July 1,Darin Company sold inventory costing $5,000 to Dee Company for $6,000,terms 3/10,n/30.Both companies use the perpetual inventory system.Dee Company pays the invoice on July 8 and takes the appropriate discount.What journal entry will be recorded by Dee Company on July 8?

Hayward Co.reported net sales revenues of $23.76 billion and cost of goods sold of $7.2 billion.Its gross profit percentage was: