Gross profit is calculated by subtracting ________ from _________, a. operating expenses, net income b. sales discounts from sales revenue c. cost of goods sold, net sales revenue d. merchandise inventory, cost of goods sold

Gross profit is calculated by subtracting ________ from _________,  a. operating expenses, net income
b. sales discounts from sales revenue
c. cost of goods sold, net sales revenue
d. merchandise inventory, cost of goods sold
by

1 Answer

Answer :

c. cost of goods sold, net sales revenue
by

Related questions

Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale.

Description : Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale.

Last Answer : b. cost of goods sold.

Ingrid’s Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company’s gross profit rate is 40%, Ingrid’s will report monthly net sales revenue and cost of goods sold of a. $38,000 and $22,800. b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Description : Ingrid's Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company's gross profit rate is 40%, Ingrid's will report monthly net sales revenue and cost of goods ... b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Last Answer : c. $37,200 and $22,320.

Cole Company has sales revenue of $39,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Cole's gross profit is a. $30,000. b. $15,000. c. $6,000.

Description : Cole Company has sales revenue of $39,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Cole's gross profit is a. $30,000. b. $15,000. c. $6,000.

Last Answer : b. $15,000.

With respect to the income statement, a. contra-revenue accounts do not appear on the income statement. b. sales discounts increase the amount of sales. c. contra-revenue accounts increase the amount of operating expenses. d. sales discounts are included in the calculation of gross profit.

Description : With respect to the income statement, a. contra-revenue accounts do not appear on the income statement. b. sales discounts increase the amount of sales. c. contra-revenue accounts increase the amount of operating expenses. d. sales discounts are included in the calculation of gross profit.

Last Answer : d. sales discounts are included in the calculation of gross profit.

Which of the following accounts is not closed to Income Summary? a. Cost of Goods Sold b. Merchandise Inventory c. Sales d. Sales Discounts

Description : Which of the following accounts is not closed to Income Summary? a. Cost of Goods Sold b. Merchandise Inventory c. Sales d. Sales Discounts

Last Answer : b. Merchandise Inventory

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company. a. Gross profit b. Operating expenses c. Sales revenues d. Cost of goods sold

Description : Indicate which one of the following would appear on the income statement of both a merchandising company and a service company. a. Gross profit b. Operating expenses c. Sales revenues d. Cost of goods sold

Last Answer : b. Operating expenses

Which of the following expressions is incorrect? a. Gross profit – operating expenses = operating income b. Sales – cost of goods sold – operating expenses = operating income c. Operating income + operating expenses = gross profit d. Operating expenses – cost of goods sold = gross profit

Description : Which of the following expressions is incorrect? a. Gross profit – operating expenses = operating income b. Sales – cost of goods sold – operating expenses = operating income c. Operating income + operating expenses = gross profit d. Operating expenses – cost of goods sold = gross profit

Last Answer : d. Operating expenses – cost of goods sold = gross profit

After gross profit is calculated, operating expenses are deducted to determine a. gross margin. b. operating income. c. gross profit on sales. d. net margin.

Description : aAfter gross profit is calculated, operating expenses are deducted to determine a. gross margin. b. operating income. c. gross profit on sales. d. net margin.

Last Answer : b. operating income.

Sales revenue less cost of goods sold is called a. gross profit. b. net profit. c. net income. d. marginal income.

Description : Sales revenue less cost of goods sold is called a. gross profit. b. net profit. c. net income. d. marginal income.

Last Answer : a. gross profit.

The sales revenue section of an income statement for a retailer would not include a. Sales discounts. b. Sales. c. Net sales. d. Cost of goods sold.

Description : The sales revenue section of an income statement for a retailer would not include a. Sales discounts. b. Sales. c. Net sales. d. Cost of goods sold.

Last Answer : c. Net sales.

. Income from operations will always result if a. the cost of goods sold exceeds operating expenses. b. revenues exceed cost of goods sold. c. revenues exceed operating expenses. d. gross profit exceeds operating expenses.

Description : . Income from operations will always result if a. the cost of goods sold exceeds operating expenses. b. revenues exceed cost of goods sold. c. revenues exceed operating expenses. d. gross profit exceeds operating expenses.

Last Answer : b. revenues exceed cost of goods sold.

The gross profit rate is computed by dividing gross profit by a. cost of goods sold. b. net income. c. net sales. d. sales.

Description : The gross profit rate is computed by dividing gross profit by a. cost of goods sold. b. net income. c. net sales. d. sales.

Last Answer : c. net sales.

Which one of the following is shown on a multiple-step but not on a single-step income statement? a. Net sales b. Net income c. Gross profit d. Cost of goods sold

Description : Which one of the following is shown on a multiple-step but not on a single-step income statement? a. Net sales b. Net income c. Gross profit d. Cost of goods sold

Last Answer : c. Gross profit

When a periodic inventory system is used, cost of goods sold is calculated as follows: a. Ending inventory plus purchases less beginning inventory. b. Beginning inventory plus purchases less ending inventory c. Cost of merchandise purchased less ending inventory. d. Cost of merchandise sold plus beginning inventory.

Description : When a periodic inventory system is used, cost of goods sold is calculated as follows: a. Ending inventory plus purchases less beginning inventory. b. Beginning inventory plus purchases less ... of merchandise purchased less ending inventory. d. Cost of merchandise sold plus beginning inventory.

Last Answer : b. Beginning inventory plus purchases less ending inventory

A company shows the following balances: Sales $1,000,000 Sales Returns and Allowances 180,000 Sales Discounts 20,000 Cost of Goods Sold 560,000 What is the gross profit percentage? a. 56% b. 70% c. 44% d. 30%

Description : A company shows the following balances: Sales $1,000,000 Sales Returns and Allowances 180,000 Sales Discounts 20,000 Cost of Goods Sold 560,000 What is the gross profit percentage? a. 56% b. 70% c. 44% d. 30%

Last Answer : d. 30%

At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, the company’s cost of goods sold and gross profit rate must be a. $1,000,000 and 50%. b. $1,400,000 and 30%. c. $1,000,000 and 30%.

Description : At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000 ... a. $1,000,000 and 50%. b. $1,400,000 and 30%. c. $1,000,000 and 30%.

Last Answer : b. $1,400,000 and 30%.

On October 4, 2008, Terry Corporation had credit sales transactions of $2,800 from merchandise having cost $1,900. The entries to record the day's credit transactions include a a. debit of $2,800 to Merchandise Inventory. b. credit of $2,800 to Sales. c. debit of $1,900 to Merchandise Inventory. d. credit of $1,900 to Cost of Goods Sold.

Description : On October 4, 2008, Terry Corporation had credit sales transactions of $2,800 from merchandise having cost $1,900. The entries to record the day's credit transactions include a a. debit of $2,800 to ... c. debit of $1,900 to Merchandise Inventory. d. credit of $1,900 to Cost of Goods Sold.

Last Answer : b. credit of $2,800 to Sales.

Which of the following accounts has a normal debit balance? a. Merchandise Inventory b. Sales Returns and Allowances c. Cost of goods sold d. Sales

Description : Which of the following accounts has a normal debit balance? a. Merchandise Inventory b. Sales Returns and Allowances c. Cost of goods sold d. Sales

Last Answer : d. Sales

he journal entry to record a return of merchandise purchased on account under a perpetual inventory system would include a. Accounts Payable Sales Returns and Allowances b. Purchase Returns and Allowances Accounts Payable c. Accounts Payable Inventory d. Merchandise Inventory Cost of Goods Sold

Description : he journal entry to record a return of merchandise purchased on account under a perpetual inventory system would include a. Accounts Payable Sales Returns and Allowances b. Purchase Returns and ... Accounts Payable c. Accounts Payable Inventory d. Merchandise Inventory Cost of Goods Sold

Last Answer : d. Merchandise Inventory Cost of Goods Sold

In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of a. sales. b. merchandise inventory. c. sales discounts. d. freight-out.

Description : In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of a. sales. b. merchandise inventory. c. sales discounts. d. freight-out.

Last Answer : b. merchandise inventory.

Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Description : Freight costs paid by a seller on merchandise sold to customers will cause an increase a. in the selling expense of the buyer. b. in operating expenses for the seller. c. to the cost of goods sold of the seller

Last Answer : b. in operating expenses for the seller.

If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $260,000, the gross profit rate is a. 67%. b. 65% c. 35%. d. 33%.

Description : If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $260,000, the gross profit rate is a. 67%. b. 65% c. 35%. d. 33%.

Last Answer : c. 35%.

If a company has net sales of $500,000 and cost of goods sold of $350,000, the gross profit percentage is a. 70%. b. 30%. c. 15%. d. 100%.

Description : If a company has net sales of $500,000 and cost of goods sold of $350,000, the gross profit percentage is a. 70%. b. 30%. c. 15%. d. 100%.

Last Answer : b. 30%

Gross profit is A) Cost of goods sold + Opening stock B) Excess of sales over cost of goods sold C) Sales fewer Purchases D) Net profit fewer expenses of the period

Description : Gross profit is A) Cost of goods sold + Opening stock B) Excess of sales over cost of goods sold C) Sales fewer Purchases D) Net profit fewer expenses of the period

Last Answer : Answer: B

A buyer would record a payment within the discount period under a perpetual inventory system by crediting a. Accounts Payable. b. Merchandise Inventory. c. Purchase Discounts. d. Sales Discounts.

Description : A buyer would record a payment within the discount period under a perpetual inventory system by crediting a. Accounts Payable. b. Merchandise Inventory. c. Purchase Discounts. d. Sales Discounts.

Last Answer : b. Merchandise Inventory.

Under a perpetual inventory system, acquisition of merchandise is debited to the a. Merchandise Inventory account. b. Cost of Goods Sold account. c. Purchases account. d. Accounts Payable account.

Description : Under a perpetual inventory system, acquisition of merchandise is debited to the a. Merchandise Inventory account. b. Cost of Goods Sold account. c. Purchases account. d. Accounts Payable account.

Last Answer : a. Merchandise Inventory account.

In a perpetual inventory system, a return of defective merchandise by a cash customer is recorded by crediting a. Accounts Payable and Cash. b. Merchandise Inventory and Cost of Goods Sold c. Purchases Returns and Allowances and Merchandise Inventory. d. .Cash and Cost of Goods Sold.

Description : In a perpetual inventory system, a return of defective merchandise by a cash customer is recorded by crediting a. Accounts Payable and Cash. b. Merchandise Inventory and Cost of Goods Sold c. Purchases Returns and Allowances and Merchandise Inventory. d. .Cash and Cost of Goods Sold.

Last Answer : d. .Cash and Cost of Goods Sold.

In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold.

Description : In a perpetual inventory system, the Cost of Goods Sold account is used a. only when a cash sale of merchandise occurs. b. only when a credit sale of merchandise occurs. c. only when a sale of merchandise occurs. d. whenever there is a sale of merchandise or a return of merchandise sold.

Last Answer : b. only when a credit sale of merchandise occurs.

Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account.

Description : Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account.

Last Answer : d. Cost of Goods Sold account.

Two categories of expenses for merchandising companies are a. cost of goods sold and financing expenses. b. operating expenses and financing expenses. c. cost of goods sold and operating expenses. d. sales and cost of goods sold.

Description : Two categories of expenses for merchandising companies are a. cost of goods sold and financing expenses. b. operating expenses and financing expenses. c. cost of goods sold and operating expenses. d. sales and cost of goods sold.

Last Answer : c. cost of goods sold and operating expenses.

In the Clark Company, sales were $480,000, sales returns and allowances were $30,000, and cost of goods sold was $288,000. The gross profit rate was a. 64%. b. 36%. c. 40%. d. 60%.

Description : In the Clark Company, sales were $480,000, sales returns and allowances were $30,000, and cost of goods sold was $288,000. The gross profit rate was a. 64%. b. 36%. c. 40%. d. 60%.

Last Answer : b. 36%.

Flynn Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period? a. $5,000 b. $4,900 c. $4,500 d. $4,600

Description : Flynn Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period? a. $5,000 b. $4,900 c. $4,500 d. $4,600

Last Answer : b. $4,900

Which of the following is not a true statement about a multiple-step income statement? a. Operating expenses are often classified as selling and administrative expenses. b. There may be a section for nonoperating activities. c. There may be a section for operating assets. d. There is a section for cost of goods sold.

Description : Which of the following is not a true statement about a multiple-step income statement? a. Operating expenses are often classified as selling and administrative expenses. b. There may be a section for nonoperating ... be a section for operating assets. d. There is a section for cost of goods sold.

Last Answer : c. There may be a section for operating assets.

To arrive at funds from operation ,non-cash expenses must be added to---------- a) Net profit b) Gross profit c) Operating profit d) None of these

Description : To arrive at funds from operation ,non-cash expenses must be added to---------- a) Net profit b) Gross profit c) Operating profit d) None of these

Last Answer : a) Net profit

Sales –Gross Profit = ________ a) Cost of goods sold b) Net sales c) Gross Sales d) Liabilities

Description : Sales –Gross Profit = ________ a) Cost of goods sold b) Net sales c) Gross Sales d) Liabilities

Last Answer : a) Cost of goods sold

The Merchandise Inventory account is used in each of the following except the entry to record a. goods purchased on account. b. the return of goods purchased. c. payment of freight on goods sold. d. payment within the discount period.

Description : The Merchandise Inventory account is used in each of the following except the entry to record a. goods purchased on account. b. the return of goods purchased. c. payment of freight on goods sold. d. payment within the discount period.

Last Answer : c. payment of freight on goods sold.

Income from operations is gross profit less a. administrative expenses. b. operating expenses. c. other expenses and losses. d. selling expenses.

Description : Income from operations is gross profit less a. administrative expenses. b. operating expenses. c. other expenses and losses. d. selling expenses.

Last Answer : b. operating expenses.

When a seller grants credit for returned goods, the account that is credited is a. Sales. b. Sales Returns and Allowances. c. Merchandise Inventory. d. Accounts Receivable.

Description : When a seller grants credit for returned goods, the account that is credited is a. Sales. b. Sales Returns and Allowances. c. Merchandise Inventory. d. Accounts Receivable.

Last Answer : d. Accounts Receivable.

Operating ratio establishes the relationship between --------------- and net sales a) Cost of goods sold b) Cost of sales c) Cost of production d) Operating cost

Description : Operating ratio establishes the relationship between --------------- and net sales a) Cost of goods sold b) Cost of sales c) Cost of production d) Operating cost

Last Answer : d) Operating cost

In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to a. Merchandise Inventory. b. Purchase Discounts. c. Purchase Allowance.

Description : In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited to a. Merchandise Inventory. b. Purchase Discounts. c. Purchase Allowance.

Last Answer : a. Merchandise Inventory.

In the balance sheet, ending merchandise inventory is reported a. in current assets immediately following accounts receivable. b. in current assets immediately following prepaid expenses. c. in current assets immediately following cash. d. under property, plant, and equipment.

Description : In the balance sheet, ending merchandise inventory is reported a. in current assets immediately following accounts receivable. b. in current assets immediately following prepaid expenses. c. in current assets immediately following cash. d. under property, plant, and equipment.

Last Answer : a. in current assets immediately following accounts receivable.

In terms of liquidity, merchandise inventory is a. more liquid than cash. b. more liquid than accounts receivable. c. more liquid than prepaid expenses. d. less liquid than store equipment.

Description : In terms of liquidity, merchandise inventory is a. more liquid than cash. b. more liquid than accounts receivable. c. more liquid than prepaid expenses. d. less liquid than store equipment.

Last Answer : c. more liquid than prepaid expenses.

Pick out the wrong statement. (A) Gross margin = net income - net expenditure (B) Net sales realisation (NSR) = Gross sales - selling expenses (C) At breakeven point, NSR is more than the total production cost (D) Net profit = Gross margin - depreciation - interest

Description : Pick out the wrong statement. (A) Gross margin = net income - net expenditure (B) Net sales realisation (NSR) = Gross sales - selling expenses (C) At breakeven point, NSR is more than the total production cost (D) Net profit = Gross margin - depreciation - interest

Last Answer : (C) At breakeven point, NSR is more than the total production cost

Baden Shoe Store has a beginning merchandise inventory of $30,000. During the period, purchases were $140,000; purchase returns, $4,000; and freight-in $10,000. A physical count of inventory at the end of the period revealed that $20,000 was still on hand. The cost of goods available for sale was a. $164,000. b. $156,000. c. $176,000. d. $184,000.

Description : Baden Shoe Store has a beginning merchandise inventory of $30,000. During the period, purchases were $140,000; purchase returns, $4,000; and freight-in $10,000. A physical count of inventory at the end of the period revealed ... for sale was a. $164,000. b. $156,000. c. $176,000. d. $184,000.

Last Answer : c. Purchases Returns and Allo

Jake’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $20,000, terms 2/10, n/30. Returned $400 of the shipment for credit. Paid $100 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory a. increased by $19,208. b. increased by $19,700. c. increased by $19,306. d. increased by $19,308.

Description : Jake's Market recorded the following events involving a recent purchase of merchandise: Received goods for $20,000, terms 2/10, n/30. Returned $400 of the shipment for credit. Paid $100 freight on the shipment. ... . b. increased by $19,700. c. increased by $19,306. d. increased by $19,308.

Last Answer : d. increased by $19,308.

Zach’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $50,000, terms 2/10, n/30. Returned $1,000 of the shipment for credit. Paid $250 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory a. increased by $48,020. b. increased by $49,250. c. increased by $48,265. d. increased by $48,270.

Description : Zach's Market recorded the following events involving a recent purchase of merchandise: Received goods for $50,000, terms 2/10, n/30. Returned $1,000 of the shipment for credit. Paid $250 freight on the shipment ... 020. b. increased by $49,250. c. increased by $48,265. d. increased by $48,270.

Last Answer : d. increased by $48,270.

The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

Description : The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a. Accounts Payable. b. Purchase Returns and Allowances. c. Sales. d. Merchandise Inventory.

Last Answer : d. Merchandise Inventory.

A sales invoice is a source document that a. provides support for goods purchased for resale. b. provides evidence of incurred operating expenses. c. provides evidence of credit sales. d. serves only as a customer receipt.

Description : A sales invoice is a source document that a. provides support for goods purchased for resale. b. provides evidence of incurred operating expenses. c. provides evidence of credit sales. d. serves only as a customer receipt.

Last Answer : c. provides evidence of credit sales.

A merchandising company using a perpetual system may record an adjusting entry by a. debiting Income Summary. b. crediting Income Summary. c. debiting Cost of Goods Sold. d. debiting Sales.

Description : A merchandising company using a perpetual system may record an adjusting entry by a. debiting Income Summary. b. crediting Income Summary. c. debiting Cost of Goods Sold. d. debiting Sales.

Last Answer : d. debiting Sales.