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Insurance expense p5000 prepaid insurance p5000

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Insurance ExpenseP5,000Prepaid InsuranceP5,000Preparing Cost of Goods SoldThe adjusted trial balance allows the accountant to create the basic FinancialStatements: Statement of Comprehensive Income or Income Statement, Statement of Changesin Equity, Statement of Financial Position or Balance Sheet and Statement of Cash Flowsincluding notes to financial statements.The cost of goods sold and the gross profit form part of the income statement whichreports the business’ performance from its operations over a period of time. This statement beginswith\
sales which provide the regular operating revenues for the company Cost of goods sold whichrepresents the cost of the goods (purchase, price, and other cost which form part of inventory)sold during the period is then deducted from sales to arrive at the gross profit, to wit:Gross Profit = Sales – Cost of Goods SoldIV. WE’RE ON OUR WAYMULTIPLECHOICE.Directions:Choose the letter of the BEST answer.1.These are goods purchased that remains unsold at the end of the accounting period.
2.It is a reduction from the selling price in order to promote sale of the merchandise.
3.The type of business that buys and sells goods.
4.In this inventory system, the business immediately adjusts the inventory account everytime there is purchase and sale transaction.A. PerpetualB. PeriodicC. MerchandisingD. Manufacturing

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Term
Summer
Professor
NoProfessor
Tags
Balance Sheet, Revenue, Generally Accepted Accounting Principles, c Merchandising

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