Accounting II Chapter 4 Review

The form of income statement that emphasizes total revenues and total expenses in determining net income is called the _____.

• single-step statement

• operating income statement

• multiple-step statement

• cash flow statement

Expenses that cannot be traced directly to operations are identified as:

• cost of goods sold.

• other revenue.

• operating expenses.

• other expenses.

Which of the following is a selling expense?

• Cost of goods sold

• Depreciation of land and building

• Advertising expense

• Rent expense

If the seller is to pay the delivery expense of delivering merchandise, the delivery terms are stated as:

• FOB n/30.

• FOB seller.

• FOB shipping point.

• FOB destination.

If the buyer is to pay the delivery expense of delivering merchandise, delivery terms are stated as:

• FOB n/30.

• FOB destination.

• FOB shipping point.

• FOB buyer.

Which of the following accounts is a contra account to Sales?

• Sales Returns and Allowances

• Accounts Receivable

• Interest Revenue

• Accounts Payable

Net sales is calculated by _____.

• adding ending inventory to total sales

• adding cost of goods sold to total sales

• subtracting customer refunds from total sales

• subtracting cost of goods sold from total sales

Merchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for $45,000. The seller issued a credit memorandum for $10,000 prior to payment. What is the amount of the cash discount allowable?

• $540

• $700

• $350

• $860

In credit terms of 1/10, n/30, the "10" represents the:

• percent of the cash discount.

• number of days in the discount period.

• full amount of the invoice.

• number of days when the entire amount is due.

Advertising expense​ (a)  

• Selling expense
• Administrative Expense
• Other expense