BetterBuy purchases computers from companies like Hewlett Packard and IBM and sells them to consumers. BetterBuy is a:

merchandising company at the retail level.

Which of the following is inventory?

Tangible property held for sale in the normal course of business.

Which of the following costs should be added to the buyer's Inventory account?

Freight-in costs with terms FOB shipping point

Sales Revenue reports the:

selling price times the quantity of goods sold.

Cost of goods sold reports the:

cost times the quantity of goods sold.

Under the periodic inventory system:

inventory must be counted at the end of each accounting period.

Verde Co. returned $500 of merchandise that was purchased on account. As a result of this transaction, assets will:

decrease and liabilities will decrease.

Multiple-step income statements:

separate core results from peripheral results.

studbud

PLL Ch 6 Merchandising Operations & Multistep Income Statement

14 termsStudBud Administration724 plays

Imported from external platform

Flashcards14 cardsFPractice quizPHost liveL

Questions 14

Answers

1
BetterBuy purchases computers from companies like Hewlett Packard and IBM and sells them to consumers. BetterBuy is a:
manufacturer.
merchandising company at the retail level.
merchandising company at the wholesale level.
service company.
2
Sales discounts should appear in the financial statements as a(n):
operating expense.
deduction from sales.
addition to inventory.
addition to sales.
3
Which of the following is inventory?
Office supplies that a company plans to use in the next few months.
Equipment used to manufacture products which will be sold later.
Tangible property held for sale in the normal course of business.
Raw materials and work in process.
4
Which of the following costs should be added to the buyer's Inventory account?
Freight-in costs with terms FOB destination
Freight-in costs with terms FOB shipping point
Freight-out costs with terms FOB shipping point
Freight-out costs with terms FOB destination
5
Sales Revenue reports the:
cost times the quantity of goods sold.
selling price times the quantity of goods sold.
cost of merchandise available to sell.
cost of merchandise purchased.
6
Gross profit is a ledger account name included with other income statement accounts.
true
false
7
Which of the following is an activity common to the operations of merchandising, manufacturing, and service companies?
Buying goods or raw materials
Selling a physical product
Incurring operating expenses
Producing the product
8
Cost of goods sold reports the:
cost of merchandise purchased.
cost of merchandise available to sell.
selling price times the quantity of goods sold.
cost times the quantity of goods sold.
9
________ sell their inventory to ________ for resale to consumers.
Wholesalers; retailers
Retailers; wholesalers
Manufacturers; service companies
Manufacturers; wholesalers
10
Which line item would be found on a merchandiser's balance sheet and not on a service firm's?
Cost of Goods Sold
Inventory
Supplies
Sales Revenue
11
Under the periodic inventory system:
inventory does not have to be counted.
inventory levels must be counted every day.
inventory must be counted at the end of each accounting period.
inventory records are updated immediately after each purchase.
12
Which of the following would generally be considered an operating revenue or expense?
Interest on a note payable
Income from renting out extra warehouse space
Depreciation
Dividends earned on an investment is another company's stock
13
Verde Co. returned $500 of merchandise that was purchased on account. As a result of this transaction, assets will:
stay the same and liabilities will decrease.
decrease and net income will decrease.
decrease and liabilities will decrease.
stay the same and net income will decrease.
14
Multiple-step income statements:
includes one subtotal for revenues and one for expenses.
separate core results from peripheral results.
exclude certain significant items from net income.
only report core results.

PLL Ch 6 Merchandising Operations & Multistep Income Statement Flashcards | StudBud