E5.1 (LO 1) Mr. McKenzie has prepared the following list of statements about service companies and merchandisers. 1. Measuring net income for a merchandiser is conceptually the same as for a service company. 2. For a merchandiser, sales less operating expenses is called gross profit. 3. For a merchandiser, the primary source of revenues is the sale of inventory. 4. Sales salaries and wages is an example of an operating expense. 5. The operating cycle of a merchandiser is the same as that of a service company. 6. In a perpetual inventory system, no detailed inventory records of goods on hand are maintained. 7. In a periodic inventory system, the cost of goods sold is determined only at the end of the accounting period. 8. A periodic inventory system provides better control over inventories than a perpetual system. Instructions Identify each statement as true or false. If false, indicate how to correct the statement. Answer general questions about merchandisers.

E5.1 (LO 1) Mr. McKenzie has prepared the following list of statements about service companies and merchandisers. 1. Measuring net income for a merchandiser is conceptually the same as for a service company. 2. For a merchandiser, sales less operating expenses is called gross profit. 3. For a merchandiser, the primary source of revenues is the sale of inventory. 4. Sales salaries and wages is an example of an operating expense. 5. The operating cycle of a merchandiser is the same as that of a service company. 6. In a perpetual inventory system, no detailed inventory records of goods on hand are maintained. 7. In a periodic inventory system, the cost of goods sold is determined only at the end of the accounting period. 8. A periodic inventory system provides better control over inventories than a perpetual system. Instructions Identify each statement as true or false. If false, indicate how to correct the statement. Answer general questions about merchandisers.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 6MC: Which of the following represents the components of the income statement for a merchandising...

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