Question Details

Terry Corporation had credit sales transactions 



1. On October 4, 2008, Terry Corporation had credit sales transactions of $2,800 from
merchandise having cost $1,900. The entries to record the day's credit transactions
include a
a. debit of $2,800 to Merchandise Inventory.
b. credit of $2,800 to Sales.
c. debit of $1,900 to Merchandise Inventory.
d. credit of $1,900 to Cost of Goods Sold.
2. Which of the following accounts is not closed to Income Summary?
a. Cost of Goods Sold
b. Merchandise Inventory
c. Sales
d. Sales Discounts
3. In the Clark Company, sales were $480,000, sales returns and allowances were $30,000,
and cost of goods sold was $288,000. The gross profit rate was
a. 64%.
b. 36%.
c. 40%.
d. 60%.
4. Net sales is sales less
a. sales discounts.
b. sales returns.
c. sales returns and allowances.
d. sales discounts and sales returns and allowances.
5. In the balance sheet, ending merchandise inventory is reported
a. in current assets immediately following accounts receivable.
b. in current assets immediately following prepaid expenses.
c. in current assets immediately following cash.
d. under property, plant, and equipment.
6. Cost of goods available for sale is computed by adding
a. freight-in to net purchases.
b. beginning inventory to net purchases.
c. beginning inventory to purchases and freight-in.
d. beginning inventory to cost of goods purchased.




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