accounting 5

Which of the following is subtracted from gross profit to reach operating income? A. programming and production and expenses B. amortization expenses C. depreciation expenses D. selling, administrative revenue, and manufacturing costs

c

For a service business, which of the following would NOT be a line item on the income statement? A. Operating income B. Fees earned C. Operating expenses D. Gross profit

d

The following items are considered "other revenue" on the multiple-step income statement EXCEPT A. interest income. B. rent revenue. C. gains resulting from the sale of fixed assets. D. None of these choices are correct.

d

Which of the following describes how a merchandise income statement is different from a service income statement? A. D The revenue from a merchandise business is reported as fees earned. B. The program and production expenses are subtracted from gross profit to arrive at operating income. C. Depreciation and amortization expenses are added to the cost of goods sold. D. A merchandise business shows a gross profit line.

d

Which of the following is NOT a common subsidiary ledger? A. Inventory subsidiary ledger B. Accounts payable subsidiary ledger C. Accounts receivable subsidiary ledger D. Cost of goods sold subsidiary ledge

d

On July 20, Rich Company sold merchandise to York Associates on account, terms FOB destination. Rich Company would record the freight cost as a____ to ___

debit delivery expense

Jones Co. returned merchandise purchased from Smith Co. Under the perpetual inventory system, the journal entry to record the return of merchandise by Jones would be _

debit Accounts Payable—Jones Co., credit Inventory

The third step or journal entry of the closing process for a business with a periodic inventory system is to

debit Income Summary for the amount of its balance (assuming net income) and credit the retained earnings account

Cash sales plus sales on account less cost of merchandise sold is equal to

gross profit

When the physical inventory on hand at the end of the accounting period is less than the balance of Inventory, the difference is known as

inventory shrinkage

Land used in the operations of the business is classified under __________ on the balance sheet.

property, plant and equipment

How is gross profit for a merchandise business determined?

sales minus cost of goods sold

During the current year, merchandise is sold for $133,000 cash and $518,700 on account. The cost of the goods sold is $410,600. What is the amount of the gross profit?

$241100

Assume the following data concerning a purchase of merchandise by Icon Co. on April 2: April 2. Purchased $4,000 of merchandise on account from Gamma Co., terms 2/10, n/30. April 4. Returned $2,000 of the merchandise purchased on April 2. April 12. Paid for the purchase of April 2 less the return and discount. The purchase amount that Icon Co. would record on April 2 would be _

3920

Which of the following accounts is NOT used in the closing process under the periodic inventory system? A. Cost of Goods Sold B. Purchases C. Purchases Discounts D. None of these choices are correct.

A

Barans Company purchased merchandise on account from a supplier for $12,500, terms 1/10, n/30. Barans returned $2,500 of the merchandise and received full credit. A. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar B. What account is debited by Barans Company to record the return?

A. $9900 (12500*0.01 (1/10)=12375 2500*.01=25 2500-25=2475 12375-2475=9900) B. Accounts Payable

Which of the following is reported on both a multiple-step income statement and a single-step income statement? A. Gross profit B. Net Income C. Cost of goods sold D. All of these choices are correct.

B

The asset turnover ratio is measured by what formula

Sales divided by average total assets

Inventory shrinkage is recorded by which of the following adjusting entries? A. Debit Cost of Goods Sold, credit Inventory B. Debit Inventory, credit Cost of Goods Sold C. Debit Inventory, credit Inventory Shrinkage D. None of these choices are correct.

a

When merchandise is sold, the revenue is reported as sales, and its cost is recognized as an expense called

cost of goods sold