Accounting Principles Prep Questions With Verified Answers

Accounting Principles Prep Questions With Verified Answers Which of the following expressions is incorrect? Sales revenue - cost of goods sold - Operating expenses = Net income Operating expenses - Cost of goods sold = Gross profit Net income + Operating expenses = Gross profit Gross profit - Operating expenses = Net income - ANSWER Operating expenses - Cost of goods sold = Gross profit Net income - ANSWER gross profit - operating expenses or Sales revenue - cost of goods sold - Operating expenses Gross profit - ANSWER Net income + Operating expenses = Which of the following items will not result in an adjustment to the inventory account balance under a perpetual system? 1) A return of merchandise inventory to the supplier 2) A purchase of merchandise 3) Payment of freight costs for goods received from a supplier 4) Payment of freight costs for goods shipped to a customer - ANSWER 4) Payment of freight costs for goods shipped to a customer Marigold Corp. sells merchandise on account for $1300 to Sheffield Company with credit terms of 2/10, n/30. Sheffield Company returns $150 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check? $1124 $1076 $1127 $1075 - ANSWER $1127 At the beginning of the year, Bridgeport had an inventory of $390000. During the year, the company purchased goods costing $1150000. If Bridgeport reported ending inventory of $300000 and sales of $1880000, their cost of goods sold and gross profit rate would be 1) $1240000 and 66%. 2) $850000 and 65.96% 3) $1240000 and 34.04%. 4) $1030000 and 34%. - ANSWER $1240000 and 34.04%. (Beginning inventory + purchased goods - ending inventory = COGS), then COGS - sales revenue / sales revenue x 100 = gross profit percentage (rate). Gross profit percentage formula - ANSWER COGS - sales revenue /