13-Suppose Alpine Sportswear suffered a fire loss and needs to estimate the cost of the goods destroyed. Beginning inventory was $110,000, net purchases totaled $660,000, and sales came to $1,100,000. Alpine's normal gross margin percentage is 51%. Use the gross margin method to estimate the cost of the inventory lost in the fire.

Select one:

a. $561,000

b. $539,000

c. $231,000

d. $770,000

14-In a periodic inventory system, cost of goods sold is not recorded as each sale occurs.

Select one:

True

False

15-Merchandising sales and costs reported on the income statement usually differ from cash receipts and payments for the period.

Select one:

True

False

16-The periodic inventory system is superior to the perpetual inventory system in preventing shrinkage.

Select one:

True

False

17-Z-Mart had a gross profit of $340,000 based on sales of $700,000. Its cost of goods sold was $350,000.

Select one:

True

False

18-Cost of goods sold is also called cost of sales.

Select one:

True

False

19-Under the perpetual system, the cost of new inventory is recorded in the Purchases account.

Select one:

True

False

20-Merchandise inventory is included in the invested assets section of the balance sheet.

Select one:

True

False

21-Assets tied up in inventory are not productive assets.

Select one:

True

False

22-Operating expenses are divided into manufacturing expenses and selling expenses on the income statement.

Select one:

True

False

23-The cost of goods sold section of a multiple-step income statement includes beginning and ending inventories, goods available for sale and operating expenses.

Select one:

True

False

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