Chapter 4 Questions Flashcards
1
Q
Michael’s Lawn Mowing. Merchandising company or not?
A
Not
2
Q
Gross profit is equal to…
A
net sales minus cost of goods sold
3
Q
Merchandise inventory includes:
A
cost to purchase
shipping cost
cost to prepare for sale
4
Q
A perpetual inventory system updates the accounting records ____:
A
for each purchase and each sale.
5
Q
A periodic inventory system updates the accounting records ____:
A
at the end of the period.
6
Q
Credit terms of “2/10, n/60” means:
A
the company will receive a 2 percent discount if paid within 10 days
7
Q
Which of the following totals and subtotals are not found on a multiple-step income statement?
Cost of goods sold, Total current assets, Net sales, Total operating expenses, Net income
A
Total Current Assets
