Can someone check my answers please? Thanks!!!?
1.two categories of expenses for merchandising companies are
a. cost of goods sold and financing expenses.
b. operating expenses and financing expenses.
c. cost of goods sold and operating expenses.
d. sales and cost of goods sold.
ANSWER C
2.Sales revenue less cost of goods sold is called
a. gross profit.
b. net profit.
c. net income.
d. marginal income.
ANSWER A
3.which of the following expressions is incorrect?
a. Gross profit – operating expenses = operating income
b. Sales – cost of goods sold – operating expenses = operating income
c. Operating income + operating expenses = gross profit
d. Operating expenses – cost of goods sold = gross profit
ANSWER D
4.Detailed records of goods held for resale are not maintained under a
a. perpetual inventory system.
b. periodic inventory system.
c. double entry accounting system.
d. single entry accounting system.
ANSWER B
5.A perpetual inventory system would likely be used by a(n)
a. automobile dealership.
b. hardware store.
c. drugstore.
d. convenience store.
ANSWER D
6. which of the following is a true statement about inventory systems?
a. Periodic inventory systems require more detailed inventory records.
b. Perpetual inventory systems require more detailed inventory records.
c. A periodic system requires cost of goods sold be determined after each sale.
d. A perpetual system determines cost of goods sold only at the end of the accounting period.
ANSWER B
7. the Merchandise Inventory account is used in each of the following except the entry to record
a. goods purchased on account.
b. the return of goods purchased.
c. payment of freight on goods sold.
d. payment within the discount period.
ANSWER C
8. Zach’s Market recorded the following events involving a recent purchase of merchandise:
Received goods for $50,000, terms 2/10, n/30.
Returned $1,000 of the shipment for credit.
Paid $250 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company’s merchandise inventory
a. increased by $48,020.
b. increased by $49,250.
c. increased by $48,265.
d. increased by $48,270.
ANSWER B
9.Interest is usually associated with
a. accounts receivable.
b. notes receivable.
c. doubtful accounts.
d. bad debts.
ANSWER B
Use the following information for questions 10–11.
A customer charges a treadmill at Hank's Sport Shop. the price is $2,000 and the financing charge is 9% per annum if the bill is not paid in 30 days. the customer fails to pay the bill within 30 days and a finance charge is added to the customer's account.
10. what is the amount of the finance charge?
a. $60
b. $15
c. $180
d. $6
ANSWER C
11. the accounts affected by the journal entry made by Hank's Sport Shop to record the finance charge are
a. Accounts Receivable
Cash
b. Cash
Finance Receivable
c. Accounts Receivable
Interest Payable
d. Accounts Receivable
Interest Revenue
ANSWER C
12. Under the allowance method, writing off an uncollectible account
a. affects only balance sheet accounts.
b. affects both balance sheet and income statement accounts.
c. affects only income statement accounts.
d. is not acceptable practice.
ANSWER B
13. if a company fails to record estimated bad debts expense,
a. cash realizable value is understated.
b. expenses are understated.
c. revenues are understated.
d.receivables are understated.
ANSWER B
14. the existing balance in Allowance for Doubtful Accounts is considered in computing bad debts expense in the
a. direct write-off method.
b. percentage of receivables basis.
c. percentage of sales basis.
d. percentage of receivables and percentage of sales basis.
ANSWER B
15. the collection of an account that had been previously written off under the allowance method of accounting for uncollectibles
a. will increase income in the period it is collected.
b. will decrease income in the period it is collected.
c. requires a correcting entry for the period in which the account was written off.
d. does not affect income in the period it is collected.
ANSWER C
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