Question 1
A classified income statement is also called a multi-step income statement.
True
False
Question 2
Net sales is calculated by deducting sales discounts and sales returns and allowances from:
A. cash sales.
B. credit sales less cash sales.
C. credit sales.
D. gross sales.
Question 3
A sales invoice for $1,000 was dated October 4 and carried cash discount terms of 2/10, n/30. How much cash will be received if the invoice is paid on October 13?
A. $1,020
B. $1,000
C. $ 980
D. $ 960
Question 4
Net sales is an approximate measure of the assets flowing into a company from its customers.
True
False
Question 5
Under the periodic inventory procedure, the cost of goods sold for each sale is determined and recorded at the time of sale.
True
False
Question 6
Usually, physical delivery of goods accompanies their sale.
True
False
Question 7
A company can appropriately record revenue when legal title to goods has passed to the consumer.
True
False
Question 8
Cynthia Company had sales of $3,000 for cash and $5,000 on account. How would these sales be recorded in the journal?
A. Debit Cash for $3,000 and Sales for $5,000 and credit Accounts Receivable for $8,000.
B. Debit Cash for $3,000 and Accounts Receivable for $5,000 and credit Sales for $8,000.
C. Debit Cash for $3,000 and Net Sales for $5,000 and credit Accounts Receivable for $8,000.
D. Debit Sales for $8,000 and credit Cash for $3,000 and Accounts Receivable for $5,000.
Question 9
Interest expense and interest revenue should be shown under the:
A. "Operating Expenses" section.
B. "Operating Revenues" section.
C. "Non operating Revenues and Expenses" section.
D. "Cost of Goods Sold" section.
Question 10
Office supplies being used in business would be carried as merchandise inventory of an automobile dealership.
True
False
Question 11
Net sales revenue is equal to:
A. Sales - Sales Discounts - Sales Returns and Allowances.
B. Sales - Sales Discounts + Sales Returns and Allowances.
C. Revenues + Sales Discounts - Sales Returns and Allowances.
D. Sales - Sales Discounts - Trade discounts - Sales Returns and Allowances.
Question 12
Given the following information, what is the gross margin percentage?
Sales $129,400
Sales discounts 6,100
Sales returns and allowances 4,700
Transportation-In 5,900
Cost of goods sold 58,800
A. 50.4%
B. 47.8%
C. 54.6%
D. 55.4%.
Question 13
If the purchase price of a product sold by Nesbit Co. rose steadily during the year, the cost of the ending inventory would be greater under LIFO than FIFO.
True
False
Question 14
Inventories should be recorded at cost unless market value is lower.
True
False
Question 15
The sale of merchandise under the perpetual inventory procedure results in a debit to Cost of Goods Sold.
True
False
Question 16
The lower-of-cost-or-market (LCM) method can be applied on a unit, class, or total inventory basis.
True
False
Question 17
Under a perpetual inventory system, the Merchandise Inventory account is updated at the time of each sale or purchase.
True
False
Question 18
Included among the unique advantages of the specific identification method is (are) the ability to:
A. be used in situations where all units are identical with no distinguishing features.
B. precisely match costs and revenues.
C. significantly reduce record keeping costs.
D. More than one of the other answers are correct.
Question 19
The most common physical flow of goods in a bakery is last-in, first-out.
True
False
Question 20
Merchandising companies purchase goods in their final form for resale rather than engage in manufacturing these goods.
True
False
Question 21
During several years of constantly rising prices, the Stetson Company used the LIFO method of inventory valuation, the Mott Company used the FIFO method of inventory valuation, and the Smith Company used the weighted-average method of inventory valuation. In which company would the balance sheet figure for inventory be closer to the current replacement cost of the merchandise on hand?
A. Smith Company
B. Smith Company and Mott Company would be similar in this regard.
C. Stetson Company
D. Mott Company
Question 22
Items of high value with unique characteristics would be best inventoried using the specific identification method.
True
False
Question 23
A perpetual inventory system provides better control over inventory items than a periodic inventory system.
True
False
Question 24
Clancey Corporation had an inventory per books of $39,200 at year-end. It took a physical count of inventory and found $33,600 of goods on hand at cost. What is the amount of inventory loss that should be recorded?
A. $ 5,600
B. $33,600
C. $39,200
D. $ 8,400
Question 25
Merchandise inventory is a current asset on the balance sheet of a merchandising company.
True
False
Question 26
In The Profit's Inventory clips video, how much waste does Unique Salon have in waste monthly?
5%
10%
15%
20%
Question 27
In The Profit's Inventory clips video, what percentage of Unique Salon's revenue comes from color?
70%
30%
50%
80%
Question 28
In The Profit's Inventory clips video, Marcus' theory on inventory is that "if it doesn't sell, it's gotta go."
True
False
Question 29
In The Profit's Inventory clips video, which company doesn't put product on the shelf because the product disappears and there is no inventory system in place?
Worldwide Trailers
Coffee
Fred's
Unique Salon
Question 30
In The Profit's Inventory clips video, Worldwide Trailers is missing how much in inventory?
$50,000
$80,000
$100,000
$0