ACC 290 Final Exam Answers Fall 2022

15. The revenue recognition principle dictates that revenue should be recognized in the accounting records: a. when the performance obligation is satisfied. 16. Merchandising companies that sell to retailers are known as a. wholesalers. 17. Gross profit equals the difference between a. sales revenue and cost of goods sold. 18. Net income will result if gross profit exceeds a. operating expenses. 19. Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account? a. Inventory 20. Financial information is presented below: Operating Expenses - $31000, Sales Revenue - $, Cost of good sold - $: The profit margin ratio would be a. 0.16. 21. Financial information is presented below: Operating expense $24000, Sales returns and allowances $6000, Sales Discounts $4000, Sales revenue $, COGS $92000: The gross profit rate would be: a. 0.36. 22. Financial information is presented below: Operating expense $63000, Sales returns and allowances $4000, Sales Discounts $7000, Sales revenue $, COGS $88000: The gross profit would be: a. $91000. 23. The LIFO inventory method assumes that the cost of the latest units purchased are a. the first to be allocated to cost of goods sold. 24. Which of the following statements is correct with respect to inventories? a. Under FIFO, the ending inventory is based on the latest units purchased. 25. All of the following are examples of internal control procedures except a. customer satisfaction surveys. 26. Each of the following is a feature of internal control except a. an extensive marketing plan.