Chapter 6:1.How is Income from Operations determined?
2.What is the formula to calculate gross profit?
3.If each purchase and sale of merchandise is recorded in the inventory and the cost of merchandise sold accounts, the method of accounting for merchandise inventory is the:
4.When purchases of merchandise are made on account and the perpetual method is used, the transaction would be recorded with the following entry:
5.The entry to record the cash sale of a webpage by Tellmore in the amount of $500 isdebit to Cash for $500, credit to Sales for $500.6.Given credit terms of 3/10, n/30 on a sale of $2,000, calculate the sales discount, assuming payment was made within the 10-day time period.
7.Given credit terms of 2/25, n/30 on a sale of $1,500, in how many days must the invoice be paid to take advantage of the discount?
8.If the sale includes the seller paying the transportation costs and assuming the responsibility for merchandise until it is received by the buyer, the transportation terms are said to be
9.When a company sells merchandise and the terms are FOB shipping point and it pays the shipping costs, the seller would record the transportation costs with the following entry:
10.The entry to record inventory shrinkage under a perpetual inventory system would include a debit to:
11.All of the following distinguish the activities of a service business from those of a merchandising business, EXCEPT:
12.Given credit terms of 3/10, n/30 on a sale of $3,000, calculate the sales discount, assuming payment was made within the 10 day time period.
13.Given credit terms of 2/15, n/30 on a sale of $1,200, how many days must the invoice be paid in order to take advantage of the discount?
Chapter 71.During the taking of a physical inventory on December 31, inventory was counted as $100,780 instead of the correct amount of $100,870. The effect of the error on the December 31 balance sheet and income statement will be:
2.Under the periodic inventory system, Village Fabrics purchases navy plaid fabric used in its fabric-selling business in the following lots: June 5 - 4 yards at $2.50 per yard, June 12 - 7 yards at $3.00 per yard, June 17 - 8 yards at $3.50 per yard. What is the periodic average cost of the fabric per yard?