Exam 2 accounting

A company's gross profit(or gross margin) was 84,000 and its net sales were 350,000 its gross margin ratio is:

24%

A company had a net sales of $21000 and accounts receivable of $2520. It's day sales uncollected equals:

2520/21000 *365= 43.8 days.

Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Net income equals:

390,000

Giorgio had cost of goods sold of $9,101 million, ending inventory of $2,089 million, and average inventory of $1,900 million. Its inventory turnover equals:

4.79

A company has net sales of $612,850 and cost of goods sold of $441,252. The company's gross profit percentage is:

40%

A company has net sales of 695,000 and COGS of 278000. It's gross profit equals:

417000

Which is NOT an internal control that should be applied when a business takes a physical count of inventory?

Counters of inventory should be those who are responsible for the inventory

If a check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period, in preparing this period's reconciliation, the amount of this check should be:

Deducted from the bank balance of cash as an outstanding check

On a bank reconciliation, a NSF check not yet recorded by the company is:

Deducted from the book balance of cash

Which of the following is NOT a limitation of internal control policies and procedures?

Establishing responsibility

When purchase costs regularly rise, the inventory costing method that yields the highest reported net income is:

FIFO method

multiple-step income statement

Have three main parts: gross profit, income from operations, and net income

An itemized statement of goods prepared by a vendor listing the customers name, items sold, sales prices; and terms on the sale is called:

Invoice

The number of days sales uncollected

Is used to measure how quickly a company can convert its accounts receivable into cash.

Which of the following is not included on a bank statement?

List of outstanding checks and deposits in transit that are currently unprocessed

After companies apply one of the four costing methods, inventory is reviewed to ensure it is reported at the:

Lower of cost or market

Morgan, Inc. uses a perpetual inventory system and the net method of recording purchases. On May 12, a merchandise purchase of $15,000 was made on credit, 2/10, n/30. The journal entry to record this purchase is:

Merchandise inventory (debit): 14,700 accounts payable: 14700

The internal document that notifies that goods have been received and describes that quantities and conditions of the goods is the :

Receiving report

Principles of Internal Control include

Separate recordkeeping from custody of assets.

Inventory Turnover Ratio

Tells how many times a company turns over its inventory in a period

Goods in transit are included in a purchaser's inventory:

When the goods are shipped FOB shipping point

Outstanding checks refer to checks that have been:

Written by the depositor, subtracted on the depositor's books, and sent to the payee but not yet turned in for payment at the bank statement date.

A merchandiser:

earns net income by buying and selling merchandise

Beginning inventory plus net purchases

merchandise available for sale

cash equivalents

short-term, highly liquid investments