1.Cost of goods sold:

A.Is another term for merchandise sales.

B.Is the term used for the purchased merchandise that was sold.

C.Is another term for revenue.

D.Is also called gross margin.

E.Is a term only used by service firms.

2.A company had sales of $467,000 and cost of goods sold of $278,000. Its gross margin equals:

A.$2.50.

B.$467,000.

C.$278,000.

D.$745,000.

E.$189,000.

3.Merchandise inventory:

A.Is a long-term asset.

B.Is a current asset.

C.Includes supplies.

D.Is classified with investments on the balance sheet.

E.Must be sold within one month.

4.The current period's ending inventory is:

A.The next period's beginning inventory.

B.The current period's cost of goods sold.

C.The prior period's beginning inventory.

D.The current period's net purchases.

E.The current period's beginning inventory.

5.The credit terms 2/10, n/30 are interpreted as:

A..2 % discount if paid within 30 days.

B.10% cash discount if the amount is paid within 2 days, or the balance due in 30 days.

C.30% discount if paid within 2 days.

D.30% discount if paid within 10 days.

E.2% cash discount if the amount is paid within 10 days, or the balance due in 30 days

6.A company purchased $2,600 of merchandise on December 5. On December 7, it returned $500 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals:

A.$200.

B.$1,564.

C.$2,542.

D.$2,048.

E.$2,058.

7.A company has net sales and cost of goods sold of $752,000 and $543,000, respectively. Its net income is $17,530. The company's gross profit and operating expenses are ________ and ____________, respectively.

A.$209,000; $191,470

B.$191,470; $209,000

C.$525,470; $227,000

D.$227,000; $525,470

E.$734,000; $191,470

8.Herald Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. Herald Company's net sales equals:

A.$5,200.

B.$129,800.

C.$133,000.

D.$135,000.

E.$140,200.

9.Goods in transit are included in a purchaser's inventory:

A.At any time during transit.

B.When the purchaser is responsible for paying freight charges.

C.When the supplier is responsible for freight charges.

D.If the goods are shipped FOB destination.

E.After the half-way point between the buyer and seller.

10.A company has inventory of 15 units at a cost of $12 each on August 1. On August 5, it purchased 10 units at $13 per unit. On August 12 it purchased 20 units at $14 per unit. On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 17 after the sale?

A.$140.

B.$160.

C.$210.

D.$380.

E.$590.