1. The purchase of inventory affects both an asset and the stockholder's equity account
True or False

2. Net Sales minus Cost of Good Sold equals Gross Profit.
True or False

3. Cost of Goods Sold is part of general and administrative expenses
True or False

4. A company has net sales of $126,000, cost of goods sold of $72,000, operating expenses of $38,000, and other expenses of $3,000. The company's orperating income is:
a. $16,000
b. $51,000
c. $54,000
d. $13,000

5. Most businesses today use the periodic inventory method.
True or False

6. The Cost of Goods Sold account appears on the:
a. balance sheet
b. statement of retained earnings
c. post- closing trial balance
d. income statement

7. Bond and Associates has the following account balances listed in alphabetical order: Accumulated Depreciation, $2,300; Accounts Payable, $8,500, Accounts Receivable, $12,000; Cash $3,500; Equipment, $44,000, Land, $21,000, Mortgage Payable, $45,000; Prepaid Insurance, $7,500; Supplies, $2,000; Unearned Revenue, $6,000; Wages payable, $4,500. Bond and Associates' current liabilities are:
a. $19,000
b. $58,000
c. $64,000
d.13,000

8. A gross profit percentage of 43% means that for every $1 of gross profit, the company has $0.443 of net income
True or False

9. Wholesalers purchase large quantities of product from manufacturers and then sell the product to retailers.
True or False