1. Describe the difference between a service and merchandising firm. Give an example of each from publicly traded companies.
2. Give a detailed example of the recording of purchases under a perpetual inventory system including returns, allowances and discounts.
3. Give a detailed example of the recording sales revenues under a perpetual inventory system including returns, allowances and discounts.
4. Give a detailed example of the recording of purchases under a periodic inventory system including returns, allowances and discounts.
5. Give a detailed example of the recording sales revenues under a periodic inventory system including returns, allowances and discounts.
6. What are the differences between a single-step and a multiple-step income statement?
7. Give an example of how to calculate cost of goods sold under a periodic inventory system. Show all relevant accounts.
8. Explain how the gross profit rate and the profit margin are computed.