Question Details

Business A 654 CHAPTER 5 PART 8

CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATIONS

121.	Which of the following is not a true statement about a multiple-step income statement?
a.	Operating expenses are similar for merchandising and service enterprises.
b.	There may be a section for nonoperating activities.
c.	There may be a section for operating assets.
d.	There is a section for cost of goods sold.


122.	Which one of the following is shown on a multiple-step but not on a single-step income statement?
a.	Net sales
b.	Net income
c.	Gross profit
d.	Cost of goods sold


123.	All of the following items would be reported as other expenses and losses except
a.	freight-out.
b.	casualty losses.
c.	interest expense.
d.	loss from employees' strikes.


124.	If a company has net sales of $700,000 and cost of goods sold of $455,000, the gross profit percentage is
a.	25%.
b.	35%.
c.	65%.
d.	100%.


125.	A company shows the following balances:
Sales Revenue	$2,500,000
Sales Returns and Allowances	450,000
Sales Discounts	50,000
Cost of Goods Sold	1,400,000
What is the gross profit percentage?
a.	30%
b.	44%
c.	56%
d.	70%


126.	The gross profit rate is computed by dividing gross profit by
a.	cost of goods sold.
b.	net income.
c.	net sales.
d.	sales revenue.


127.	In terms of liquidity, inventory is
a.	more liquid than cash.
b.	more liquid than accounts receivable.
c.	more liquid than prepaid expenses.
d.	less liquid than store equipment.


128.	On a classified balance sheet, inventory is classified as
a.	an intangible asset.
b.	property, plant, and equipment.
c.	a current asset.
d.	a long-term investment.


129.	Gross profit for a merchandiser is net sales minus
a.	operating expenses.
b.	cost of goods sold.
c.	sales discounts.
d.	cost of goods available for sale.


	130.	During 2014, Parker Enterprises generated revenues of $90,000. The company- expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000.

Parker- gross profit is
a.	$24,000.
b.	$27,000.
c.	$45,000.
d.	$90,000.


131.	During 2014, Parker Enterprises generated revenues of $90,000. The company- expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000.

Yoder- income from operations is
a.	$18,000.
b.	$27,000.
c.	$45,000.
d.	$90,000.


	132.	During 2014, Parker Enterprises generated revenues of $90,000. The company- expenses were as follows: cost of goods sold of $45,000, operating expenses of $18,000 and a loss on the sale of equipment of $3,000.

Yoder- net income is
a.	$24,000.
b.	$27,000.
c.	$45,000.
d.	$90,000.


133.	Financial information is presented below:
Operating Expenses	$  60,000
Sales Revenue	  225,000
Cost of Goods Sold	  135,000

Gross profit would be
a.	$30,000.
b.	$90,000.


MC. 133	(Cont.)
c.	$165,000.
d.	$225,000.


134.	Financial information is presented below:
Operating Expenses	$  60,000
Sales Revenue	  225,000
Cost of Goods Sold	  135,000

The gross profit rate would be
a.	.133.
b.	.400.
c.	.600.
d.	.733.


135.	Financial information is presented below:
Operating Expenses	$  90,000
Sales Returns and Allowances	26,000
Sales Discounts	12,000
Sales	300,000
Cost of Goods Sold	158,000

Gross profit would be
a.	$104,000.
b.	$116,000.
c.	$130,000.
d.	$142,000.


136.	Financial information is presented below:
Operating Expenses	$  90,000
Sales Returns and Allowances	26,000
Sales Discounts	12,000
Sales Revenue	300,000
Cost of Goods Sold	158,000

The gross profit rate would be
a.	.347.
b.	.397.
c.	.473.
d.	.542.


137.	Financial information is presented below:
Operating Expenses	$  90,000
Sales Returns and Allowances	18,000
Sales Discounts	12,000
Sales Revenue	320,000
Cost of Goods Sold	174,000

The amount of net sales on the income statement would be
a.	$290,000.
b.	$302,000.
c.	$308,000.
d.	$320,000.


138.	Financial information is presented below:
Operating Expenses	$  90,000
Sales Returns and Allowances	18,000
Sales Discounts	12,000
Sales Revenue	320,000
Cost of Goods Sold	174,000

Gross profit would be
a.	$26,000.
b.	$116,000.
c.	$128,000.
d.	$134,000.


139.	Financial information is presented below:
Operating Expenses	$  90,000
Sales Returns and Allowances	18,000
Sales Discounts	12,000
Sales Revenue	320,000
Cost of Goods Sold	174,000

The gross profit rate would be
a.	.363.
b.	.400.
c.	.456.
d.	.503.

140.	If a company has sales revenue of $630,000, net sales of $600,000, and cost of goods sold of $390,000, the gross profit rate is
a.	35%.
b.	38%
c.	62%.
d.	65%.