QUESTION 26 0.1 points Save Answer Rains Company is a furniture retailer. On January 14, 2017, Rains purchased merchandise inventory at a cost of $60,000. Credit terms were 2/10, n/30. The inventory was sold on account for $100,000 on January 21, 2017. Credit terms were 1/10, n/30. The accounts payable was settled on January 23, 2017 and the accounts receivables were settled on January 30, 2017. Which statement is correct? Cash flows were affected on January 14 and January 21. Gross profit percentage is 60%. On January 30, 2017, customers should remit cash in the amount of $99,000 There is not enough information available to answer this question. QUESTION 27 0.1 points Save Answer The figure for which of the following items is determined at a different time under the perpetual inventory method than under the periodic method? Sales Revenue Cost of Goods Sold Purchases Accounts Receivable QUESTION 28 0.1 points Save Answer Which of the following is not considered in computing net cost of purchases? Purchases returns and allowances Purchases Freight paid on purchased goods Freight paid on goods shipped to customers QUESTION 29 0.1 points Save Answer Net income will result if gross profit exceeds cost of goods sold operating expenses. purchases. cost of goods sold plus operating expenses. QUESTION 30 A sales discount does not O provide the purchaser with a cash saving. 0.1 points Save Answer reduce the amount of cash received from a credit sale. increase a contra revenue account. Oincrease an operating expense account. QUESTION 31 0.1 points Save Answer A sales invoice is prepared when goods are sold for cash. are sold on credit. sold on credit are returned. are sold on credit or for cash. QUESTION 32 0.1 points Save Answer The periodic inventory system is used most commonly by companies that sell low-priced, high-volume merchandise. high-priced, high-volume merchandise. high-priced, low-volume merchandise high-priced, low and high-volume merchandise. QUESTION 33 0.1 points Save Answer Financial information is presented below: Operating expenses Sales retums and allowances Sales discounts Sales revenue Cost of goods sold 45,000 3,000 7,000 160,000 96,000 The gross profit rate would be .36. 64 40 34 QUESTION 34 0.1 points Save Answer United Services and Supplies reports net income of $60,000 and cost of goods sold of $360,000. If US&Ss gross profit rate was 40%, net sales were $600,000 $900,000. $960,000. $660,000 QUESTION 35 0.1 points Save Answer Assume Grammar Company uses the periodic inventory system and has a beginning inventory balance of $5,000, purchases of $75,000, and sales of $125,000. Grammar closes its records once a year on December 31. In the accounting records, the inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was equal to $5,000. more than $5,000. less than $5,000. indeterminate. QUESTION 36 0.1 points Save Answer Stan's Market recorded the following events involving a recent purchase of inventory: Received goods for $120,000, terms 2/10, n/30. Returned $2,400 of the shipment for credit. Paid $600 freight on the shipment. Paid the invoice within the discount period As a result of these events, the company's inventory increased by $115,248. increased by $118,200 increased by $115,836 increased by $115,848. QUESTION 37 0.1 points Save Answer When using a periodic inventory system, which statement concerning the computation of cost of goods sold is correct? The amount of ending inventory is determined on the last day of the accounting period Cost of goods available for sale includes net purchases plus the ending inventory Purchases represent cash paid for purchases during the accounting period Freight-in is ignored. QUESTION 38 0.1 points Save Answer The collection of an $800 account beyond the 2 percent discount period will result in a debit to Cash for $784. credit to Accounts Receivable for $800. credit to Cash for $800 debit to Sales Discounts for $16. QUESTION 39 0.1 points Save Answer What is an advantage of using the multiple-step income statement? It highlights the components of net income. Gross profit is not a separate item. It is easier to prepare than the single-step income statement. Net income will be higher than net income computed using the single-step income statement QUESTION 40 0.1 points Save Answer A merchandiser that sells directly to consumers is a retailer. wholesaler broker. service enterprise QUESTION 41 0.1 points Save Answer Operating expenses would include interest expense income tax expense. freight-out. freight-out and interest. QUESTION 42 0.1 points Save Answer Which of the following would not be considered a merchandising operation? Retailer Wholesaler Service firm Merchandising company QUESTION 43 0.1 points Save Answer Gross profit does not appear on a merchandising company income statement. on a service company income statement. to be relevant in analyzing the operation of a merchandising company. on the income statement if the periodic inventory system is used because it cannot be calculated. QUESTION 44 0.1 points Save Answer Which of the following is not a true statement about a multiple-step income statement? Operating expenses do not include income tax expense. There may be a section for non-operating activities. There may be a section for operating assets There is a section for cost of goods sold QUESTION 45 0.1 points Save Answer When using a perpetual inventory system, why are discounts credited to Inventory? The discounts are debited to discount expense and thus the credit has to be made to merchandise inventory. The discounts reduce the cost of the inventory. The discounts are a reduction of business expenses. None of these answers choices are correct QUESTION 46 0.1 points Save Answer The primary source of revenue for a wholesaler is investment income service revenue the sale of merchandise. the sale of plant assets the company owns QUESTION 47 0.1 points Save Answer Inventory becomes part of cost of goods sold when a company pays for the inventory. O purchases the inventory. sells the inventory receives payment from the customer. QUESTION 48 0.1 points Save Answer All of the following statements are true regarding the periodic inventory system except Under the periodic inventory system, the balance of cost of goods sold is calculated at the end of the period. Under the periodic inventory system, the balance in ending inventory is calculated at the end of the period. Using the periodic inventory system affects the balance sheet contents differently than when the perpetual system is used Under the periodic system, a company uses separate accounts to record freight costs, returns, and discounts. QUESTION 49 0.1 points Save Answer A credit sale of $1,400 is made on July 15, terms 2/10, net/30, on which a return of $100 is granted on July 18. What amount is received as payment in full on July 24? $1,400 $1,274 $1,350 $1,372 QUESTION 50 0.1 points Save Answer Financial information is presented below: Operating expenses Sales retums and allowances Sales discounts Sales revenue Cost of goods sold 28,000 7,000 3,000 50,000 98,000 The profit margin would be 28 .09. 30. 10. 0