1Cost of goods sold appears on both a multi-step income statement and a single-step income statement.
2Both purchase discounts and sales discounts appear on the income statement of a company that uses the perpetual inventory method.
Answer: False
Difficulty: 1
LO: 5-5
3Referring to the following table, what is Operating income?
Sales revenue$460,000
Cost of goods sold300,000
Operating expenses85,000
Sales discounts20,000
Sales returns and allowances15,000
Interest revenue5,000
A)$ 40,000
B)$ 55,000
C)$160,000
D)$190,000
4Referring to the following table, what is the Net income?
Sales revenue$460,000
Cost of goods sold300,000
Operating expenses85,000
Sales discounts20,000
Sales returns and allowances15,000
Interest revenue5,000
A)$ 35,000
B)$ 45,000
C)$ 60,000
D)$180,000
5Which of the following is subtracted from Net sales revenue to arrive at Gross profit?
A)Cost of goods available for sale
B)Cost of goods sold
C)Sales discounts and sales returns and allowances
D)Operating expenses
6Which of the following is subtracted from Gross profit to arrive at Operating income?
A)Cost of goods available for sale
B)Cost of goods sold
C)Sales discounts and sales returns and allowances
D)Operating expenses
7Where do Inventory and Cost of goods sold appear?
A)On the balance sheet and statement of retained earnings, respectively
B)On the statement of retained earnings and income statement, respectively
C)On the balance sheet and income statement, respectively
D)On the income statement and statement of cash flows, respectively
8Which of the following is subtracted from Sales revenue to arrive at Net sales revenue?
A)Cost of goods available for sale
B)Cost of goods sold
C)Sales discounts and sales returns and allowances
D)Operating expenses