Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 2, Problem 2.2P
Costs and Expenses
The following costs are incurred by a retailer:
- Display fixtures in a retail store
- Advertising
- Merchandise for sale
- Incorporation (i.e., legal costs, stock issue costs)
- Cost of a franchise
- Office supplies
- Wages and salaries
- Computer software
- Computer hardware
Required
For each cost, explain whether all of the cost or only a portion of the cost would appear as an expense on the income statement for the period in which the cost was incurred. If not all of the cost would appear on the income statement for that period, explain why not.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
In the income statement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?
Cost of goods manufactured
Work in process completed
Cost of merchandise available for sale
Finished goods
The dollar amount paid by a retailer to acquire a product from a wholesaler is known
as the retailer's
expenses
cost
MSRP
markup
Indicate whether each of the following costs is a product cost or a period (selling and administrative) cost:
Event
a.
b.
C. Advertising costs.
d.
e.
f.
g.
Goods purchased for resale.
Salaries of salespersons.
h.
i.
Transportation-out.
Interest on a note payable.
Salary of the company president.
Transportation-in.
Insurance on the office building.
Office supplies.
Chapter 2 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 2 - Read each definition below and write the number of...Ch. 2 - Prob. 2.1ECh. 2 - The Operating Cycle Two Wheeler Cycle Shop buys...Ch. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Current Ratio Baldwin Corp. reported the following...Ch. 2 - Classification of Assets and Liabilities Indicate...Ch. 2 - Selling Expenses and General and Administrative...Ch. 2 - Prob. 2.7ECh. 2 - Income Statement Ratio The income statement of...Ch. 2 - Statement of Retained Earnings Landon Corporation...
Ch. 2 - Components of the Statement of Cash Flows Identify...Ch. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Materiality Joseph Knapp, a newly hired accountant...Ch. 2 - Costs and Expenses The following costs are...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Statement of Cash Flows Colorado Corporation was...Ch. 2 - Basic Elements of Financial Reports Comparative...Ch. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Comparability and Consistency in Income Statements...Ch. 2 - Prob. 2.12AMCPCh. 2 - Prob. 2.1DCCh. 2 - Prob. 2.2DCCh. 2 - Analysis of Cash Flow for a Small Business...Ch. 2 - Prob. 2.4DCCh. 2 - The Expenditure Approval Process Roberto is the...Ch. 2 - Prob. 2.6DC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The product cost for a merchandising retailer or wholesaler includes: i. all of the costs incurred to manufacture the productsii. shipping costs paid by the company selling goods to the retailer or wholesaleriii. shipping costs paid by the acquiring retailer or wholesaler for inventoryiv. purchase cost of inventoryarrow_forwardComputing cost of goods sold and operating income, merchandising company Consider the following partially completed income statements for merchandising companies and compute the missing amounts:arrow_forwardThe cost of goods purchased line on the income statement of a retailer is the equivalent to which line on a manufacturer’s income statement? a. Cost of goods sold b. Cost of goods available for sale c. Cost of goods manufactured d. Cost of raw materials purchased Clear my choicearrow_forward
- How is the average unit cost (of sold products) calculated at the end of a period, for a retailer? Select one: O a. Total Operating Expenses/Total Number of units Sold O b. Cost of Goods Manufactured/Total units Produced O c. Total Cost of Goods Sold /Total Number of units Sold O d. Total Service Costs/Total Number of Services Providedarrow_forwardOffice salaries, depreciation expense on office equipment, and office supplies expense are examples of what type of expenses for a merchandising business? Group of answer choices administrative expenses selling expenses miscellaneous expenses other expensesarrow_forwardWhat is the revenue account for a merchandising business called? Group of answer choices gross profit fees earned net sales sales or sales revenue.arrow_forward
- Which of the following is classified as a general expense? U A) Depreciation costs of showroom O B) Legal fees O C) Promotional expenses U D) Advertising costs U E) Commissions paid to salespeoplearrow_forwardThe main difference between the income statements of a merchandising and a service type business is: A) the period covered by the statements. the manner by which the revenues are presented. the manner by which expenses are presented. D the computation of net profit.arrow_forward1. Which of the following would not be considered as a component of the "cost" of Goods Sold?a. Salesforce salariesb. Transportation purchasec. Import duties or raw materiald. Factory electricity expense 2. Revenue minus all direct costing of making the goods or supplying the service is known as?a. Gross profitb. Cost of salesc. Expensesd. Net profit 3. During the costing process, to arrive at the gross profit of a trading business, which one of the following formulas is applied?a. Sales - (Beginning Inventory - Purchases - Ending Inventory)b. Sales - (Beginning Inventory + Purchases + Ending Inventory)c. Sales - (Beginning Inventory + Purchases - Ending Inventory)d. Sales - (Beginning Inventory - Purchases + Ending Inventory)arrow_forward
- income statement for merchandisingbusiness using the function of expense formarrow_forwardTwo categories of expenses for merchandising companies are Select one: a. cost of goods sold and financing expenses. b. operating expenses and financing expenses. c. sales and cost of goods sold. d. cost of goods sold and operating expensesarrow_forwardincome statement for merchandisingbusiness using the function of expense form May someone please help mearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY