College Acct 1- Chapter 4

Front

Inventory is reported on the ____________ and as a(n) ___________ asset.

Back

Balance Sheet; current

Front

How do you calculate Cost of Goods Sold (COGS)?

Back

Beginning Inventory + Purchases - Ending Inventory

Front

Which of the following accounts does NOT appear on the balance sheet of a service company? Accounts Payable, Cash, Equipment, Merchandise Inventory, Supplies

Back

Merchandise Inventory

Front

A company purchased $80,000 of merchandise on August 10 with terms of 2/10, n/45. On August 12, it returned $10,000 of that merchandise. On August 19, it paid the balance owed for the merchandise taking any discount that it was entitled to. The cash paid on August 19 equals:

Back

$68,600

Front

Merchandise Inventory:

Back

Is a current asset

Front

Expenses of promoting sales by displaying and advertising merchandise, making sales and delivering goods to customers are:

Back

Selling Expenses

Front

Stuart Company had GROSS sales of $225,000, sales discounts of $5,000, and sales returns of $2,000. Stuart Company's NET sales equals:

Back

$218,000

Front

A company's gross profit was $52,250 and its net sales were $227,600. Its gross margin ratio equals:

Back

23.0%

Front

An income statement that separates operating revenues and expenses from non-operating ones and shows multiple subtotals is a:

Back

Multiple-step income statement

Front

The credit terms 2/15, n/45 are interpreted as:

Back

2% cash discount if the amount is paid within 15 days, or the balance is due in 45 days