FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
True or False Questions
Statements
1. Unlike merchandising companies, income statements
of service
companies include cost of goods sold as a line item.
2. The primary activity of manufacturing businesses is to purchase goods
from a wholesaler and resell them.
3. Service companies include companies that provide health care,
communication, banking, and other important benefits to society.
4. Merchandising companies, like service companies, do not have a Cost
of Goods Sold account.
5. Period costs, such as office supplies, are expensed in the period they
were incurred.
6. Product costs are first recorded as an asset in an inventory account and
are expensed as cost of goods sold once the product is sold.
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- True or False. Closing entries for a merchandising business are not similar to those for a service business.arrow_forwardMay i know the correct answers for both of itarrow_forwardIncome from operations for a merchandising company is sales less 1.operating expenses. 2.operating expenses and cost of goods sold. 3.cost of goods sold. 4.non-operating items and cost of goods sold.arrow_forward
- I need help with this accounting problemarrow_forward(Multiple Choice) The operating cycle of a retailer is normally a. longer than the operating cycle of a service business. b. shorter than the operating cycle of a service business. c. the same length as the operating cycle of a service business. d. a retailer does not have an operating cycle.arrow_forwardSLO-5.1. for a merchandising business is determined by subtracting the Cost of Goods Sold from the Sale Income account. OOperating Income ONet Income OGross Profit OMerchandise Available for Salearrow_forward
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