Chapter 5-6

Question 1

An income measure that includes gains and losses that are excluded from determination of net income.

Answer 1

Comprehensive income

Question 2

A statement that presents items that are not included in the determination of net income, referred to as other comprehensive income.

Answer 2

Comprehensive income statement

Question 3

An account that is offset against a revenue account on the income statement.

Answer 3

Contra revenue account.

Question 4

The total cost of merchandise sold during the period.

Answer 4

Cost of goods sold (COGS)

Question 5

The excess of net sales over the cost of goods sold.

Net sales- cost of goods sold

Answer 5

Gross profit

Question 6

Gross profit expressed as a percentage by: amount of gross profits/net sales.

Answer 6

Gross profit rate

Question 7

Sales less sales return and allowances and sales discount.

Answer 7

Net sales

Question 8

An inventory system which a company does not maintain detailed records of goods on hand throughout the period and determines the cost of goods sold only at the end of an accounting period.

Answer 8

Periodic inventory system.