Quiz 2_ Accounting

Gross profit will result if:

• operating expenses are less than net income

• sales revenues are greater than operating expenses.

• sales revenues are greater than cost of goods sold.

• operating expenses are greater than cost of goods sold.

A company has sales of $763,000 and cost of goods sold of $306,000. Its gross profit equals:

• $(457,000).

• $763,000.

• $306,000.

• $457,000.

• $1,069,000.

A company purchased $3,100 of merchandise on July 4 with terms 3/10, n/30. On July 7, it returned $340 worth of merchandise. On July 13, it paid the full amount due. The amount of the cash paid on July 13 equals:

• $340.

• $2,667.

• $2,677.

• $2,760.

• $3,100.

A company purchased $3,700 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $850 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, the correct journal entry to record the payment on July 12 is:

• Debit Merchandise Inventory $2,850; credit Cash $2,850.

• Debit Cash $2,850; credit Accounts Payable $2,850.

• Debit Accounts Payable $2,850; credit Merchandise Inventory $57; credit Cash $2,793.

• Debit Accounts Payable $2,850; credit Inventory $2,850.

• Debit Accounts Payable $2,793; debit Discounts $57; credit Cash $2,850.

The steps in the accounting cycle for a merchandising company are the same as those in a service company except

• an additional adjusting journal entry for inventory may be needed in a merchandising company.

• closing journal entries are not required for a merchandising company.

• a post-closing trial balance is not required for a merchandising company

• an income statement is required for a merchandising company

Zessa Company had sales of $150,200, sales discounts of $2,250, and sales returns of $3,605. Zessa Company's net sales equals:

• $5,855.

• $144,345.

• $147,950.

• $150,200.

Carnival Company had $830,000 in sales, sales discounts of $12,450, sales returns and allowances of $18,675, cost of goods sold of $394,250, and $285,520 in operating expenses. Net income equals:

• $798,875.

• $150,230.

• $119,105.

• $181,355.

The operating cycle of a service company is usually shorter than that of a merchandising company.

• True

• False

Ending inventory plus the cost of goods purchased equals cost of goods available for sale

• False

• True

A credit sale of NT$7,500 is made on June 13, terms 2/10, net/30. A return of NT$500 is granted on June 16. The amount received as payment in full on June 23 is:

• 7,000

• 6,860

• 6,850

• 6,500