22 Which of the following events is not a business transaction? a. Investment of cash by the owner O b. Incurred utility expenses for the month O c. Earned revenue for services provided O d. Hired employees 24 The cost of goods available for sale is allocated to the cost of goods sold and the a. Beginning inventory. O b. Gross profit O . Cost of goods purchased O d. Ending inventory

22 Which of the following events is not a business transaction? a. Investment of cash by the owner O b. Incurred utility expenses for the month O c. Earned revenue for services provided O d. Hired employees 24 The cost of goods available for sale is allocated to the cost of goods sold and the a. Beginning inventory. O b. Gross profit O . Cost of goods purchased O d. Ending inventory

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 20MC: A multi-step income statement ________. A. separates cost of goods sold from operating expenses B....

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Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). a. Utilities Expense b. Advertising Expense c. Purchases Discounts d. Sales Returns and Allowances e. Interest Income f. Freight In g. Depreciation Expense, Equipment h. Interest Expense i. Rent Expense j. Sales
A multi-step income statement ________. A. separates cost of goods sold from operating expenses B. considers interest revenue an operating activity C. is another name for a simple income statement D. combines cost of goods sold and operating expenses
Identify items missing in determining cost of goods sold For (a) through (e), identify the items designated by X and Y. A. Purchases (X + Y) = Net purchases B. Net purchases + X = Cost of inventory purchased C. Inventory (beginning) + Cost of inventory purchased = X D. Inventory available for sale X = Cost of inventory before estimated returns E. Cost of goods sold before estimated returns X = Cost of goods sold
7. Which of the following is classified as general and administrative expenses? a. Salaries of admin personnel b. Salaries of sales agents c. Rent for sales office d. Depreciation of delivery van 8. What is the resulting figure if inventory is deducted from the cost of goods available for sale? a. Gross Profit b. Net Purchases c. Net Sales d. Cost of Goods Sold
9. Which of the following is the correct computation for the cost of goods available for sale? a.Net Sales - Cost of Goods Sold b. Sales - Cost of Goods Sold c. Beginning Inventory + Net Purchases d. Net Purchases - Ending Inventory 10. This refers to the shipping cost necessary to bring inventory purchased from the seller to the premises of the company. a. Freight - In b. Freight - Out c. Delivery Expenses d. Travelling Expenses
17/_____________ is treated as an asset and the cost of goods on hand as well as available for sale at any given time in the business. a. Merchandise inventory b. Cost of goods sold c. None d. Gross profit
Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net income b.gross sales c.income from operations d.gross profit the inventory system employing accounting records that continuously disclose the amount of inventory is called a.retail b.periodic c.physical d.perpetual
1. Selling expenses are shown in which of the following statement?a. Cost of Goods Soldb. Profit and Loss Accountc. Manufacturing Accountd. Profit and Loss Appropriation Account 2. Which of the following is used to determine the cost of goods sold?a. Beginning Inventory + Purchasesb. Beginning Inventory + Purchases - Salesc. Beginning Inventory + Net Purchases + Direct Expenses - Ending Inventoryd. Ending Inventory + Purchases - Beginning Inventory 3. Which of the following would not be considered as a component of the "cost" of stock?a. Salaries of selling staffb. Transportation inward costsc. Import dutiesd. Purchase price
Assuming that Merchandise business use simple step income statement. Which of the following will be correct result of Net Income by the business? a. Total expenses will be divided by Total revenue b. Total revenue will be multiplied by cost of goods sold c. Total Expenses will be deducted from Total Revenue d. Total Revenue will be deducted from Total expenses
Ma4. Question 42. The cost of inventory that has been sold to customers is called: A. cost of goods sold, and it appears on the income statement. B.inventory, a current asset that appears on the balance sheet. C.inventory, a current asset that appears on the income statement. D.cost of goods sold, and it appears on the balance sheet. Question 43. ABC Company sold $120,000 of goods and accepted the customer's $120,000 10%, 1- year note in exchange. Assuming 10% approximates the market rate of return, how much interest would be recorded for the year ending December 31 if the sale was made on June 30? A.12,000 B. 3,000 C.0 D. 6,000 Question 44 Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account A.increases the allowance for uncollectible accounts. B.has no effect on the allowance for uncollectible accounts. C.decreases net income. D. has no effect on net income.
Activity 1: TRUE OR FALSE. Write True if the statement is correct and False if it is not. ____ 1. The SCI is a picture of the result of operations of the company as of the cut-off date.____ 2. The major elements of the SCI are income and expenses.____ 3. Cost of sales is computed as cost of goods available for sale less ending inventory.____ 4. Expenses recognition strictly requires the matching expenses against revenue.____ 5. Goods returned by customers are immediately deducted to the Sales Revenue account.____ 6. In periodic inventory accounting, inventory is determined by conducting a physical count of merchandise owned.____ 7. Expenses decrease assets and therefore have credit normal balances.____ 8. Depreciation expense is a line account found in an SCI prepared following the multi-step format. ____ 9. Revenue result in increase in equity and therefore has a credit normal balance____ 10.All accounts in SCI is also called nominal accounts. Activity 2: Problem 1: The Happy…
Income Summary is closed to what account Income accounts O Expense Accounts Owner's equity account Cash Which of the following is equal to the amount of total goods available for sale? * Inventory, beg + Inventory, end Net purchases + Inventory end Cost of goods sold + Inventory end Cost of goods sold - inventory end