Test 2
Periodic System
Companies do not keep detailed inventory records, they determine cost of goods sold only at the end of the accounting period.
the operating cycle of a merchandiser is the same as that of a service company
False
Gross Profit=
Net Sales-Cost of Goods Sold
Net Income=
Revenues - Expenses
Beginning inventory plus the cost of goods purchased= cost of goods available for sale
True
Measuring net income for a merchandiser is conceptually the same as for a service company.
True
Perpetual System
companies keep detailed records of the cost of each inventory purchase and sale. Companies determine cost of goods sold each time a sale occurs
For a merchandiser, sales less operating expenses is called gross profit.
false
in a perpetual inventory system, no detailed inventory records of goods on hand are maintained
false
income from operations=
gross profit - operating expenses
for a merchandiser, the primary source of revenues is the sale of inventory
true
sales salaries and wages is an example of an operating expense
true