Transportation-in is

a. an operating expense.

b. part of cost of goods purchased.

c. recorded as a purchases expense in a periodic inventory system.

d. added to transportation-out as part of the calculation of cost of goods sold.

Roki Inc. uses the periodic inventory system and has the following data for the month of June:

June

1

On hand, 50 units @ $15.00 each

$750.00

5

Purchased 115 units @ $15.10 each

1,736.50

14

Purchased 75 units @ $15.20 each

1,140.00

Total cost of goods available for sale

$3,626.50

30

On hand, 90 units

If the June 30 inventory included 45 units from the June 5 purchase and 45 units from the June 14 purchase, Roki's cost of goods sold for June under the specific identification method would be

a.$2.373.00.

b.$2,263.00.

c.$3,626.50.

d.$2,945.00.

Which one of the following is a common analytical tool used by merchandising companies, butnotby service companies?

a. Current ratio

b. Earnings per share

c. Working capital

d. Gross profit ratio

Cost of goods sold is equal to the

a. cost of goods purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts minus ending inventory.

b. cost of goods purchased plus transportation-in costs less ending inventory.

c. cost of goods purchased plus transportation-in costs plus beginning inventory minus purchase returns and allowances and purchase discounts.

d. total amount of merchandise purchased during the year.

Readers.com uses a perpetual inventory system and has the following data for the month of February:

Feb.1

On hand, 30 units @ $5.00 each

$150

8

Purchased 40 units @ $5.35 each

214

15

Sold 50 units

22

Purchased 40 units @ $5.20 each

208

28

On hand, 60 units

If Readers.com uses the moving average method, how much is ending inventory on February 28?

a.$312

b.$306

c.$300

d.$318

Which of the following statements regarding cost of goods available for sale is true?

a. Cost of goods available for sale is an expense account.

b. Cost of goods available for sale is subtracted from net sales to arrive at the gross margin.

c. Cost of goods available for sale is added to beginning inventory to determine cost of purchases during the period.

d. Cost of goods available for sale is a "pool" of costs to be distributed between what was sold and what was not sold during a period.

Blenham, Inc. sells merchandise on credit. If a customer pays its balance due after the discount period has passed, what is the effect of the payment on Blenham's accounting equation?

a. Assets and stockholders' equity increase.

b. Assets decrease and liabilities increase.

c. Assets and stockholders' equity decrease.

d. There is no net effect.

Texas Inc. sold merchandise to Fagin Corp. on December 28, 2017, with shipping terms of FOB destination point. Fagin Corp. received the merchandise on January 3, 2018. Which of the following statements is true?

a. Texas should record sales revenue on December 28, 2017.

b. Fagin Corp. should record a liability for the purchase on January 3, 2018.

c. Fagin Corp. should include the merchandise in its inventory at December 31, 2017.

d. Fagin Corp. should pay the transportation costs.

Herndon Corp. purchased merchandise on account from Likert Corp. on November 18, 2017. On November 21, 2017, Herndon returned damaged merchandise to Likert and was granted an adjustment on its account. Herndon uses the periodic inventory system. What effect does the merchandise return have on Herndon's accounting equation?

a. Assets and stockholders' equity decrease.

b. Liabilities decrease and stockholders' equity increases.

c. Liabilities and stockholders' equity decrease.

d. Assets and liabilities decrease.

In order to evaluate a company's gross profit ratio, the ratio should be compared with

a. those of both prior years and competitors.

b. other companies in the same industry.

c. forecasted financial statements.

d. those of prior years.

Readers.com uses a perpetual inventory system and has the following data for the month of February:

Feb.1

On hand, 30 units @ $5.00 each

$150

8

Purchased 40 units @ $5.35 each

214

15

Sold 50 units

22

Purchased 40 units @ $5.20 each

208

28

On hand, 60 units

If Readers.com uses the moving average method, how much is cost of goods sold for the units sold on February 15?

a.$260

b.$245

c.$270

d.$255

Which of the following statements isnottrue regarding the gross profit ratio?

a. The gross profit ratio can help investors decide whether or not to buy a company's stock.

b. The gross profit ratio should be compared with both a company's prior years' ratios and competitors'.

c. The gross profit ratio is calculated by dividing net sales by gross profit.

d. The gross profit ratio is a measure of profitability.

A company fails to record one storeroom full of inventory in its year-end inventory records. As a result, this will cause an

a. understatement of gross profit in the following year.

b. overstatement of retained earnings at the end of the year.

c. overstatement of cost of goods sold for the current year.

d. overstatement of inventory on the year-end balance sheet.

Zebra Company overstated its December 31, 2017, inventory by $5,200. Which of the following statement is true concerning Zebra's financial statement amounts for 2017?

a. Cost of goods sold is overstated.

b.Net income is understated.

c. Gross profit is overstated.

d. Retained earnings are understated.

Travelli Co. sold merchandise to Trapani Co. on the account, $17,000, terms 2/15, net 45. The cost of the merchandise sold is $15,400. Travelli Co. issued an allowance for $1,750 for merchandise returned that originally cost $1,400. Trapani Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?

a.$14,945

b.$17,000

c.$15,250

d. None of these choices are correct.