ACCT 201A Midterm 2 Review
comprehensive Questions and Answers
with Verified Solutions
Question 1:
1. Gross profit equals the difference between a. net income and operating
expenses. b. net sales revenues and cost of goods sold. c. net sales
revenues and operating expenses. d. net sales revenues and cost of
goods sold plus operating expenses.
Answer:
b. net sales revenues and cost of goods sold.
Question 2:
2. Two categories of expenses in merchandising companies are a. cost of
goods sold and financing expenses. b. operating expenses and financing
expenses. c. cost of goods sold and operating expenses. d. sales and
cost of goods sold.
Answer:
c. cost of goods sold and operating expenses.
Question 3:
3. If a purchaser using a periodic inventory system pays the
transportation costs, then the a. Merchandise Inventory account is
increased. b. Merchandise Inventory account is not affected. c. Freight-in
account is increased. d. Delivery Expense account is increased.
Answer:
c. Freight-in account is increased.
, Question 4:
4. Freight costs incurred by a seller on merchandise sold to customers
will cause an increase a. in the selling expenses of the buyer. b. in
operating expenses for the seller. c. to the cost of goods sold of the seller.
d. to a contra-revenue account of the seller.
Answer:
b. in operating expenses for the seller.
Question 5:
5.Ellis Company sells merchandise on account for $1,500 to Thomas
Company with credit terms of 2/10, n/30. Thomas Company returns $500
of merchandise that was damaged, along with a check to settle the
Answer:
c. Cash 980 Sales Returns and Allowances 500
Question 6:
Use the following information to answer questions 6 through 8 Financial
information is presented below: Operating Expenses...............$45,000
Sales Returns and Allowances..13,000 Sales
Discount............................6,000 Sales........................................150,000
Cost of Goods Sold...................67,000
Answer:
b. $64,000.
comprehensive Questions and Answers
with Verified Solutions
Question 1:
1. Gross profit equals the difference between a. net income and operating
expenses. b. net sales revenues and cost of goods sold. c. net sales
revenues and operating expenses. d. net sales revenues and cost of
goods sold plus operating expenses.
Answer:
b. net sales revenues and cost of goods sold.
Question 2:
2. Two categories of expenses in merchandising companies are a. cost of
goods sold and financing expenses. b. operating expenses and financing
expenses. c. cost of goods sold and operating expenses. d. sales and
cost of goods sold.
Answer:
c. cost of goods sold and operating expenses.
Question 3:
3. If a purchaser using a periodic inventory system pays the
transportation costs, then the a. Merchandise Inventory account is
increased. b. Merchandise Inventory account is not affected. c. Freight-in
account is increased. d. Delivery Expense account is increased.
Answer:
c. Freight-in account is increased.
, Question 4:
4. Freight costs incurred by a seller on merchandise sold to customers
will cause an increase a. in the selling expenses of the buyer. b. in
operating expenses for the seller. c. to the cost of goods sold of the seller.
d. to a contra-revenue account of the seller.
Answer:
b. in operating expenses for the seller.
Question 5:
5.Ellis Company sells merchandise on account for $1,500 to Thomas
Company with credit terms of 2/10, n/30. Thomas Company returns $500
of merchandise that was damaged, along with a check to settle the
Answer:
c. Cash 980 Sales Returns and Allowances 500
Question 6:
Use the following information to answer questions 6 through 8 Financial
information is presented below: Operating Expenses...............$45,000
Sales Returns and Allowances..13,000 Sales
Discount............................6,000 Sales........................................150,000
Cost of Goods Sold...................67,000
Answer:
b. $64,000.
