1. Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as a. selling expenses b. general expenses c. other expenses d. administrative expenses 2. The form of income statement that derives its name from the fact that the total of all expenses is deducted from the total of all revenues is called a a. multiple-step statement b. revenue statement c. report-form statement d. single-step statement 3. Merchandise inventory is classified on the balance sheet as a a. Current Liability b. Current Asset c. Long-Term Asset d. Long-Term Liability 4. Using the following information, what is the amount of cost of merchandise sold? Purchases $32,000 Purchases discounts $960 Merchandise inventory September 1 5,700 Merchandise inventory September 30 6,370 Sales returns and allowances 910 Sales 63,000 Purchases returns and allowances 1,200 Freight In 1,040 a. $26,900 b. $20,530 c. $30,210 d. $28,130 5. Where are selling and administrative expenses found on the multiple-step income statement? a. before gross profit b. after sales and before gross profit c. after net income before expenses d. after gross profit 6. Ending inventory is made up of the oldest purchases when a company uses a. first-in, first-out b. last-in, first-out c. average cost d. retail method 7. The inventory costing method that reports the earliest costs in ending inventory is a. FIFO b. LIFO c. Average cost d. Specific identification 8. Which of the following companies would be more likely to use the specific identification inventory costing method? a. Gordons Jewelers b. Lowes c. Best Buy d. Wal-Mart Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sep. 1 Inventory 20 units at $20 4 Sold 10 units 10 Purchased 30 units at $25 17 Sold 20 units 30 Purchased 10 units at $30 11. Calculate the gross profit for Jonas Company based on the data given below: Sales $835,000 Selling Expenses 52,500 Cost of Merchandise Sold 476,000 Sales Discounts 7,100 Sales Returns and Allowances 3,650 $303,050 12. Beginning inventory, purchases, and sales for Product - Weld TM are as follows: Sep. 1 Beginning Inventory 24 units @ $10 Sep. 5 Sale 17 units Sep. 17 Purchase 10 units @ $15 Sep. 30 Sale 8 units Assuming a perpetual inventory system and the first-in, first-out method, determine (a) the cost of the merchandise sold for the September 30 sale and (b) the inventory on September 30. a/$135 b/9 units =$135