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ACCT125 Quiz 1 of 3

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Question 1 1 points Save;What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?;Gross profit;Income from operations;Net income;Gross sales;Question 2 1 points Save;Expenses that CANNOT be traced directly to operations are identified as;other income.;operating expenses.;cost of goods sold.;other expenses.;Question 3 1 points Save;What is subtracted from sales to arrive at net sales?;Sales returns and allowances;Sales discounts;Both sales discounts and sales returns and allowances;Neither sales discounts nor sales returns and allowances;Question 4 1 points Save;The sales discount account is a contra account to Sales.;True;False;Question 5 1 points Save;NBC Company had $32,000 in net sales, $15,000 in cost of merchandise sold, $18,000 in operating expenses, and $2,000 in other income. What is NBC Company?s gross profit?;$17,000;$3,000;$1,000;($1,000);Question 6 1 points Save;Where are selling and administrative expenses found on the multi-step income statement?;Before gross profit;After sales and before gross profit;After net income and before expenses;After gross profit;Question 7 1 points Save;Under a perpetual inventory system;accounting records continuously disclose the amount of inventory.;increases in inventory resulting from purchases are debited to Purchases.;there is no need for a year-end physical count.;the purchase returns and allowances account is credited when goods are returned to vendors.;Question 8 1 points Save;When purchases of merchandise are made for cash, the transaction;increases Cash, decreases Merchandise Inventory.;increases Merchandise Inventory, decreases Cash.;increases Merchandise Inventory, decreases Cash Discounts.;increases Merchandise Inventory, decreases Purchases.;Question 9 1 points Save;Deana, Inc.;Deana, Inc. purchased merchandise for $500,000, received credit for purchase returns of $25,000, took purchase discounts of $10,000, and paid transportation in of $20,000.;Refer to Deana, Inc. If Deana, Inc. had $20,000 in beginning inventory, and sold goods costing $300,000, what is the ending inventory balance?;$165,000;$240,000;$200,000;$185,000;Question 10 1 points Save;Operating expenses are subtracted from fees earned for a service business and from gross profit for a merchandising business.;True;False;Question 11 1 points Save;In credit terms of 1/10, n/30, the ?10? represents the;number of days in the discount period.;full amount of the invoice.;number of days when the entire amount is due.;percent of the cash discount.;Question 12 1 points Save;Merchandise subject to terms 1/10, n/30, FOB shipping point, is sold on account to a customer for $20,000. The seller paid transportation costs of $1,000 and issued a credit memorandum for $5,000 prior to payment. What is the amount of the cash discount allowable?;$160;$150;$140;$100;Question 13 1 points Save;A. Bonds Company;The following is a single-step income statement for the A. Bonds Company;A. Bonds Company;Income Statement;For the Year Ended December 31, 2010;Revenues;Net Sales $250,000;Interest Income 17,500;Total Revenues $267,500;Expenses;Cost of Goods Sold $ 50,000;Selling Expenses 20,000;General and Administrative Expenses 27,500;Interest Expense 12,500;Income Tax Expense 39,000;Total Expenses 149,000;Net Income $118,500;Refer to A. Bonds Company. If the income statement were prepared in a multiple-step format, income from operations would be;$101,000.;$113,500.;$118,500.;$152,500.;Question 14 1 points Save;Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as credit sales.;True;False;Question 15 1 points Save;For the perpetual inventory system, which of the following effects does NOT occur upon the return from a customer of merchandise sold on account?;Increases Sales Returns and Allowances and decreases Accounts Receivable;Decreases Cost of Merchandise Sold and increases Merchandise Inventory;Increases Purchase Returns and Allowances and decreases Merchandise Inventory;All of these occur.;Question 16 1 points Save;Net income or loss may appear on the income statement of both a service business and a merchandising business.;True;False;Question 17 1 points

 

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