Question 1(1 point)

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In a profitable company, the gross profit margin will always be _________ the profit margin.

Question 1 options:

equal to

lower than

higher than

The gross profit margin and the profit margin can never be the same.

Question 2(1 point)

A company shows the following balances:

Sales$1,000,000

Sales returns and allowances250,000

Cost of goods sold600,000

Operating expenses75,000

. What is the gross profit margin?

Question 2 options:

80%

20%

40%

60%

Question 3(1 point)

Which of the following expressions is INCORRECT?

Question 3 options:

Gross profit - operating expenses = profit.

Profit + operating expenses = gross profit.

Operating expenses - cost of goods sold = gross profit.

Sales - cost of goods sold - operating expenses = profit.

Question 4(1 point)

Using a perpetual inventory system, the cost of freight in

Question 4 options:

increases the cost of merchandise inventory.

reflects the cost of delivering goods to customers.

is reflected in an expense account called Freight In.

is always paid by the seller.

Question 5(1 point)

Sales revenue less the cost of goods sold equals

Question 5 options:

profit.

gross profit.

operating expenses.

ending inventory

Question 6(1 point)

Which of the following accounts has a normal credit balance?

Question 6 options:

Sales

Selling Expense

Sales Returns and Allowances

Delivery Expense

Question 7(1 point)

Harvest Company has an offer to purchase 100 seeds for $100, 200 seeds for $150 or 300 seeds for $175. This offer is called a(n)

Question 7 options:

purchase discount.

purchase return.

special merchandise terms.

quantity discount.

Question 8(1 point)

In a perpetual inventory system, a merchandiser will record the purchase of individual inventory items in a (an) ____________ account.

Question 8 options:

general ledger

subsidiary

expense

control

Question 9(1 point)

Which of the following is NOT needed to calculate the gross profit margin?

Question 9 options:

Operating Expenses

Sales Returns and Allowances

Sales

Cost of Goods Sold

Question 10(1 point)

The HST collected on a sale of merchandise is recorded as

Question 10 options:

sales revenue.

a selling expense.

cost of goods sold.

sales tax payable.

Question 11(1 point)

Profit from operations will result if

Question 11 options:

revenues exceed operating expenses.

the cost of goods sold exceeds operating expenses.

revenues exceed cost of goods sold.

gross profit exceeds operating expenses.

Question 12(1 point)

Under a perpetual inventory system, the following entry would be made to record the return of merchandise purchased on account:

Question 12 options:

Accounts Payablexxx

Merchandise Inventoryxxx

Accounts Payablexxx

Cost of Goods Soldxxx

Accounts Payablexxx

Purchasesxxx

Accounts Payablexxx

Purchase Returns and Allowancesxxx

Question 13(1 point)

Using a perpetual inventory system, if Shediac Video Store's accounting records show an ending inventory balance of $25,000 and a physical count shows a balance of $23,000, it is necessary to

Question 13 options:

remove the nonexistent inventory from its records.

debit its inventory records.

purchase additional inventory.

credit Cost of Goods Sold.

Question 14(1 point)

When recording a credit sale in a perpetual inventory system, all of the following accounts are affected EXCEPT

Question 14 options:

Cash.

Accounts Receivable.

Merchandise Inventory.

Sales Revenue.

Question 15(1 point)

When goods are returned that relate to a prior cash sale,

Question 15 options:

Sales Returns and Allowances will be credited.

the Cash account will be credited.

Accounts Receivable will be credited.

the Sales Returns and Allowances account should not be used.

Question 16(1 point)

On August 1, Rothesay Boat Club provided services on account for $800. Rothesay received the entire balance on August 31 and recorded the payment by debiting Cash for $800 and crediting Service Revenue for $800. On the August 31 financial statements

Question 16 options:

assets and liabilities will be overstated.

assets and revenues will be understated.

assets and liabilities will be understated.

assets and revenue will be overstated.

Question 17(1 point)

The balances that appear on the post-closing trial balance will match the

a.

b.

c.

d.

Question 17 options:

balance sheet account balances after closing entries.

income statement account balances after adjustments.

income statement account balances after closing entries.

balance sheet account balances after adjustments.

Question 18(1 point)

An error has occurred in the closing entry process if

Question 18 options:

the revenue and expense accounts have zero balances.

the balance sheet accounts have zero balances.

the owner's capital account is credited for the amount of profit.

the owner's drawings account is closed to the owner's capital account.

Question 19(1 point)

When is a post-closing trial balance prepared?

Question 19 options:

after the balance sheet has been prepared

after adjusting entries but before closing entries

when reversing entries are required

after both adjusting and closing entries have been posted

Question 20(1 point)

Which of the following depicts the proper sequence of steps in the accounting cycle?

Question 20 options:

trial balance, prepare financial statements, djusting entries

a trial balance, adjusting entries, prepare financial statements

a trial balance, post to ledger accounts, post adjusting entries

Journalize the transactions, analyze business transactions, prepare trial balance

Question 21(1 point)

Which one of the following is an optional step in the accounting cycle of a business enterprise?

Question 21 options:

Post to the ledger accounts.

Prepare work sheet.

Prepare trial balance.

Analyze business transactions.

Question 22(1 point)

Which of the following would NOT be classified a non-current liability?

Question 22 options:

current maturities of long-term debt

mortgage payable

bonds payable

lease liabilities

Question 23(1 point)

Closing entries are journalized and posted

Question 23 options:

after the financial statements are prepared.

before the financial statements are prepared.

at the end of each interim accounting period.

when the business is closing its doors.

Question 24(1 point)

The Singh Company paid $630 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of $360 and a credit to Accounts Receivable, $360. The correcting entry is

Question 24 options:

Accounts Receivable360

Accounts Payable630

Cash990

Accounts Payable630

Cash630

Accounts Receivable360

Cash360

Accounts Receivable360

Accounts Payable360

Question 25(1 point)

The most important information needed to determine if companies can pay their current obligations is the

Question 25 options:

relationship between current and non-current liabilities.

relationship between current assets and current liabilities.

projected profit for next year.

profit for this year.