QUESTION 5

1. Using a periodic inventory system, the sale of inventory on account would be recorded as:

   		Debit Cost of Goods Sold; credit Inventory.
   		Debit Inventory; credit Sales Revenue.
   		Debit Sales Revenue; credit Accounts Receivable.
   		Debit Inventory; credit Accounts Receivable.

1 points

QUESTION 6

1. Katie Malls has the following inventory transactions for the year:

   Date		Transaction		Number of units		Unit cost		Total cost
   Jan. 1		Beginning inventory		20		$35		$ 700
   Apr. 8		Purchase		50		40		2,000
   								$2,700
   Jan. 1 Dec. 31		Total sales to customers		60

   What amount would Madison report for cost of goods sold using LIFO under a periodic inventory system?

   		$2,100
   		$2,350
   		$2,300
   		$2,400

1 points

QUESTION 7

1. Which of the following levels of profitability in a multiple-step income statement represents all revenues less all expenses?

   		Gross profit.
   		Operating income.
   		Income before income taxes.
   		Net income.

1 points

QUESTION 8

1. At the end of a reporting period, Gaston Corporation determines that its ending inventory has a cost of $6,500 and a market value of $5,800. The adjustment to write down inventory to market value would include:

   		A debit to inventory for $5,800.
   		A credit to inventory for $700.
   		A debit to cost of goods sold for $5,800.
   		A credit to cost of goods sold for $700.