Ch 3 SmartbookAssignment
Which of the following items appear on the balance sheet?
- Merchandise Inventory - Cash
Which of the following statements are true?
- Product costs are expensed in the period in which inventory is sold. - Period costs are expensed in the period in which they are incurred.
A company purchased inventory under terms 4/5, n/30. The effective annual interest rate for the cash discount is ______.
58.4%
If cost of goods available for sale equals $80,000 and the beginning balance in the company's inventory account was $6,000, the amount of inventory purchases during the accounting period was
74,000
The Merchandise Inventory account appears on the _
Balance Sheet
Company ING made a cash payment for the $6,000 balance due on the account payable. What is the impact on the statement of cash flows?
Cash outflow for operating activities increases.
Cost of goods available for sale is allocated between Merchandise Inventory and an expense account called
Cost of goods sold
Which of the following items appears on the income statement?
Gross Margin Cost of Goods Sold Selling and Administrative Expenses
Which of the following real world companies are merchandising businesses?
Sams club , target and sears
Which of the following define the terms 1/20, n/45?
The buyer will receive a 1% discount if payment is made within 20 days; otherwise the full payment is due in 45 days.
Which of the following define the terms 2/10, n/30?
The buyer will receive a 2% discount if payment is made within 10 days; otherwise the full payment is due in 30 days.
Ron Company sold land that cost $150,000 for $160,000. The company also sold inventory that cost $60,000 for $85,000. Based on this information, the company will report ______
a gain of $10,000 and gross margin of $25,000
When inventory is sold for cash, the sales part of the transaction impacts
all financial statements
Cost of goods available for sale is calculated as ______.
beginning inventory balance + inventory purchased during the period
A purchase discount ______.
does not impact the income statement decreases liabilities
Cost of Goods Sold is allocated between Cost of Goods Available for Sale and Merchandise Inventory.
false
If a merchandising company sells land for more than its cost, it will report
gain on the sale of land
Revenue minus cost of goods sold is called
gross margin. gross profit.
Cost of goods sold appears on the
income statement
Gross margin appears on the
income statement
Product costs are also called Blank 1Blank 1 inventoriable , Incorrect Unavailable costs.
inventory
The products that merchandising companies sell to their customers are called merchandise . (Enter only one word per blank.)
inventory
Gross margin is equal to sales revenue
minus cost of goods sold
Sea Company reported gross margin on the sale of inventory and a gain on the sale of land in its Year 1 income statement. Based on this information, the Year 2 income is ______.
more likely to show a gross margin on the sale of inventory than a gain on the sale of land
Income statements that display additional relationships rather than a single comparison of all revenues minus all expenses are called
multistep
Recording a purchase discount impacts
only the balance sheet
When inventory is sold for cash, the expense recognition part of the transaction impacts
only the balance sheet and income statement
Paying the balance in accounts payable impacts
only the balance sheet and statement of cash flows
Cash paid to purchase inventory appears in the ______ activities section of the statement of cash flows
operating
When inventory is sold for cash, the sales part of the transaction represents
source of assets
Cash discount terms 2/10, n/30 mean the
total amount due must be paid within 30 days purchaser will receive a 2% discount if payment is made within 10 days
When inventory is sold for cash, the expense recognition part of the transaction represents
use of assets
Product costs are normally expensed in the period
when inventory is sold