Which of the following statements is true? A) Timberland sells primarily to other businesses on a credit base and would record even when i t is made from the Timberland records ales upon shipment of product to their customers D) Both A and Care true. when a company ships product to a customer with the terms fob (free on board) destination, which of the following is true? A The seller will pay the shipping charges and title will not be exchanged until goods are received by the customer. 3) The buyer will pay the shipping charges and title is exchanged at point of shipment C) The seller will pay the shipping and title is exchanged at point of shipment D) The buyer will pay the shipping and title is exchanged when the goods are received by the customer 25. A company purchased goods on credit with credit terms of 3/15, n/45. Although the company does not have cash available to pay within the discount period, the manager of the company is considering borrowing money to take advantage of the discount. In order to make the appropriate decision, the manager computed the annual interest rate associated with the sales discount. This annual rate is approximately A) 56% B) 38% C) 25% D) 18% 26.By treating sales returns and allowances as a contra revenue but treating sales discounts and credit card discounts as selling expenses, we have the following impact A) Gross margin is reduced by sales returns and allowances, sales discounts and credit card discounts B) Gross margin is reduced by sales returns and allowances but all three accounts cause a decrease in income from operations C) Gross margin is reduced by sales returns and allowance but operating income is only reduced by sales discounts and credit card discounts D) None of the above is correct 27.In 2000, Coca-Cola reported net operating revenues of $19.9 billion and cost of goods sold of $6.2 billion while Pepsico reported revenues of $20.4 billion and cost of goods sold of $7.9 billion. Which of the following statements is correct? A) Coca-Cola generated a lower gross profit percentage because their sales revenue was lower. B) While PepsiCo generated more revenue than Coca-Cola, they generated a lower gross profit percentage. c) PepsiCo did a worse job of controlling product costs as a percentage of sales than did Coca Cola D) Both B and C are correct. 28. Albert Company uses the allowance method to account for bad debts. The entry to write-off a bad account (one that will never be collected) should be: Debit Credit A) Bad debt expense Accounts receivable B) Bad debt expense Allowance for doubtful accounts C) Sales revenue Accounts receivable D) Allowance for doubtful accounts Accounts receivable Which of the following statements is true? A) Timberland sells primarily to other businesses on a credit base and would record even when i t is made from the Timberland records ales upon shipment of product to their customers D) Both A and Care true. when a company ships product to a customer with the terms fob (free on board) destination, which of the following is true? A The seller will pay the shipping charges and title will not be exchanged until goods are received by the customer. 3) The buyer will pay the shipping charges and title is exchanged at point of shipment C) The seller will pay the shipping and title is exchanged at point of shipment D) The buyer will pay the shipping and title is exchanged when the goods are received by the customer 25. A company purchased goods on credit with credit terms of 3/15, n/45. Although the company does not have cash available to pay within the discount period, the manager of the company is considering borrowing money to take advantage of the discount. In order to make the appropriate decision, the manager computed the annual interest rate associated with the sales discount. This annual rate is approximately A) 56% B) 38% C) 25% D) 18% 26.By treating sales returns and allowances as a contra revenue but treating sales discounts and credit card discounts as selling expenses, we have the following impact A) Gross margin is reduced by sales returns and allowances, sales discounts and credit card discounts B) Gross margin is reduced by sales returns and allowances but all three accounts cause a decrease in income from operations C) Gross margin is reduced by sales returns and allowance but operating income is only reduced by sales discounts and credit card discounts D) None of the above is correct 27.In 2000, Coca-Cola reported net operating revenues of $19.9 billion and cost of goods sold of $6.2 billion while Pepsico reported revenues of $20.4 billion and cost of goods sold of $7.9 billion. Which of the following statements is correct? A) Coca-Cola generated a lower gross profit percentage because their sales revenue was lower. B) While PepsiCo generated more revenue than Coca-Cola, they generated a lower gross profit percentage. c) PepsiCo did a worse job of controlling product costs as a percentage of sales than did Coca Cola D) Both B and C are correct. 28. Albert Company uses the allowance method to account for bad debts. The entry to write-off a bad account (one that will never be collected) should be: Debit Credit A) Bad debt expense Accounts receivable B) Bad debt expense Allowance for doubtful accounts C) Sales revenue Accounts receivable D) Allowance for doubtful accounts Accounts receivable