Exam+1+Practice+Problem+Solutions

# Exam+1+Practice+Problem+Solutions - 77.Cost of goods sold A...

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77.Cost of goods sold: A) Is another term for merchandise sales. B) Is the term used for the cost of buying and preparing merchandise for sale. C) Is another term for revenue. D) Is also called gross margin. E) Is a term only used by service firms. Answer: B AICPA BB: Industry AICPA BB: Critical Thinking AICPA FN: Measurement AICPA FN: Reporting AACSB: Communications AACSB: Analytic 78. A company had sales of \$695,000 and its cost of goods sold of \$278,000. Its gross margin equals: A) \$(417,000). B) \$ 695,000. C) \$ 278,000. D) \$ 417,000. E) \$ 973,000. Answer: D Calculation: \$695,000 - \$278,000 = \$417,000 AICPA BB: Industry AICPA BB: Critical Thinking AICPA FN: Measurement AICPA FN: Reporting AACSB: Communications AACSB: Analytic 79. A company had sales of \$375,000 and its gross profit was \$157,500. Its cost of goods sold equals: A) \$(217,000). B) \$ 375,000. C) \$ 157,500. D) \$ 217,500. E) \$ 532,500. Answer: D Calculation: \$375,000 - \$157,500 = \$217,500 AICPA BB: Industry AICPA BB: Critical Thinking AICPA FN: Measurement AICPA FN: Reporting AACSB: Communications AACSB: Analytic

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82. A company had expenses other than cost of goods sold of \$51,000. Determine sales and gross profit given cost of goods sold was \$25,000 and net income was \$60,000. A)
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Exam+1+Practice+Problem+Solutions - 77.Cost of goods sold A...

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