Classified multiple-step income statements

Multiple Choice

a. Are required by Canada Revenue Agency

b. Are generally used for internal reporting

c. Are required for the perpetual system

d. List cost of goods sold as an operating expense

e. Do not report gross profit

Under a perpetual inventory system, merchandising companies must account for credit sales transactions

Multiple Choice

a. by debiting accounts receivable and crediting cost of goods sold

b. by debiting cost of goods sold and crediting merchandise inventory

c. by debiting sales and crediting accounts receivable

d. by debiting cash and crediting sales

All of the choices are correct