Hello, Please answer these 4 questions as I am reviewing for an Exam and would like to learn thoroughly!

1)

A company shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of a:

	a.	Sales discount.
	b.	Sales return.
	c.	Sales revenue.
	d.	Trade discount
	e.	Sales allowance.

2)

A company has the following at the end of the year:

InventoryQuantityPurchase CostMarket Value

Item A100$5$8

Item B200$9$7

For what amount would ending inventory be reported in the balance sheet?

	a.	$2,300.
	b.	$1,900.
	c.	$2,400.
	d.	$2,200.
	e.	$2,600.

3)

Which of the following statements regarding liquidity ratios is false?

	a.	All of the other statements are true.
	b.	The purchase of a building for cash has no effect on liquidity.
	c.	As a rule of thumb, a current ratio of 1 or higher often reflects an acceptable level of liquidity.
	d.	A high current ratio generally indicates the ability to pay current liabilities on a timely basis.
	e.	Providing services to customers for cash improves liquidity.

4)

Calculate the gross profit percentage for company A and B, respectively. (round to the nearest tenth)

Data to analyze:

		Company	Company
		A	B
	Net Sales	$ 50,000	$ 75,000
	Cost of Goods Sold	$ 20,000	$ 25,000
	Gross Profit	???	???
	Gross Profit %	???	???

	a.	60.0 and 66.7 percent, respectively.
	b.	250.0 and 300.0 percent, respectively.
	c.	40.0 and 33.3 percent, respectively.
	d.	100.0 and 100.0 percent, respectively.