13. The organization tasked by Congress with the legal authority to prescribe accounting principles is:

(a) the Securities and Exchange Commission (SEC).

(b) the Financial Accounting Standards Board (FASB).

(c) the Financial Accounting Foundation (FAF).

(d) the Accounting Principles Board (APB).

14. The three major sections of the statement of cash flows are cash flows from:

(a) operating activities, selling activities, and investing activities.

(b) continuing activities, financing activities, and investing activities.

(c) operating activities, financing activities, and investing activities.

(d) operating activities, discontinued activities, and extraordinary activities.

15. The retained earnings are reported on which statement?

(a) Statement of cash flows

(b) Income statement

(c) Statement of retained earnings

(d) Balance sheet

16. In a multiple-step income statement, the amount left after subtracting operating expenses from gross profit but before other losses and gains that do not relate to the primary activities of the company is called:

(a) net income.

(b) earnings per share.

(c) operating income.

(d) income from continuing operations.

17. Using the information in the table below, calculate the proper amount of cost of goods sold for the period. Adapt the provided formula to the amounts given to find the answer.

Purchases - $275,000

Purchase Returns - $12,500

Freight-In - $45,000

Freight-Out - $15,000

Beginning Inventory - $95,000

Ending Inventory - $67,000

(a) $290,500

(b) $303,500

(c) $320,500

(d) $335,500

$36,000 $325,000 $10,400 6,800 Cost of goods sold Inventory, January 1 Purchases Less: Purchase returns and allowances Purchase discounts Net purchases Add: Freight-in Cost of goods purchased Cost of goods available for sale Inventory, December 31 Cost of goods sold 17,200 307,800 12.200 320,000 356,000 40,000 $316,000