Question: 1. The largest expense category on the income statement of most merchandising companies is: A. s...

1. The largest expense category on the income statement of most merchandising companies is: A. selling expenses B. administrative expenses C. other expenses D. cost of goods sold 2.Using a perpetual inventory system, which of the following entries would record the cost of merchandise sold on credit? A. Debit Inventory and credit Cost of Goods Sold B. Debit Cost of Goods Sold and credit Purchases C. Debit Cost of Goods Sold and credit Inventory D. Credit Sales and debit Accounts Receivable 3.FIFO tends to increase cost of goods sold when: A. costs are constant B. costs are increasing C. costs are declining D. FIFO will always yield the lowest possible cost of goods sold 4.When the FIFO method is used, cost of goods sold is assumed to consist of: A. the most recently purchased units B. the units with the lowest per unit cost C. the units with the highest per unit cost D.the oldest units 5.If ending inventory for the year ended December 31, 2016, is understated, this error will cause owners' equity to be: A. understated at the end of 2016 and overstated at the end of 2017 B. correctly stated at the end of 2016 and overstated at the end of 2017 C. overstated at the end of 2016 and understated at the end of 2017 D. understated at the end of 2016 and correctly stated at the end of 2017 6.The gross margin percentage is one of the most closely watched profitability measures. It can be calculated by: A. dividing cost of goods sold by average inventory B. dividing gross margin by net accounts receivable C. dividing gross margin by net sales revenue D. dividing cost of goods sold by net sales revenue 7.The gross margin rate is equal to: A. net sales revenue minus gross margin on sales B. net sales revenue minus cost of goods sold C. gross margin divided by net sales revenue D. cost of goods sold divided by net sales revenue 8.Given the following data, calculate the cost of ending inventory using the weightedminusaverage method for a periodic inventory system, rounding to the nearest dollar. (Do not round in the process of your calculations, only round your final answer.) 1/1 Beginning inventory 50 units at $10 per unit 3/5 Purchases 30 units at $14 per unit 5/30 Purchases 25 units at $15 per unit 10/25 Purchases 20 units at $16 per unit 12/31 Ending inventory 45 units A. $720 B. $581 C. $450 D. $619 9.A business offers credit terms of 2/15, n/30. These terms indicate that: A. a discount of 2% can be taken if the invoice is paid within 15 days of the invoice date B. no discount is offered for early payment C. the buyer can take a 2% discount if the bill is paid within 30 days of the invoice date D. the total amount of the invoice must be paid within 15 days of the invoice date 10.King Size International buys beds from a manufacturer for sale overseas. A shipment of beds to King Size was received slightly damaged. The manufacturer agreed to take an extra 10% off of its invoice price to King Size if it will keep and sell the beds to its customers. In this situation, King Size has received a: A. purchase allowance B. purchase discount C. sales allowance D. purchase return