61. In a periodic inventory system, cost of goods sold is recorded as each sale occurs.
62. When preparing the unadjusted trial balance in a periodic inventory system, the amount that appears as Merchandise Inventory is the ending inventory amount.
Multiple Choice Questions
63. A merchandising company:
A. Earns net income by buying and selling merchandise.
B. Receives fees only in exchange for services.
C. Earns profit from commissions only.
D. Earns profit from fares only.
E. Buys products from consumers.
64. Cost of goods sold:
A. Is another term for merchandise sales.
B. Is the cost of merchandise sold to customers.
C. Is another term for revenue.
D. Is also called gross margin.
E. Is a term only used by service firms.
65. A company had sales of $695,000 and cost of goods sold of $278,000. Its gross profitequals:
A. $(417,000)
B. $695,000
C. $278,000
D. $417,000
E. $973,000
66. A company had sales of $375,000 and gross profit of$157,500. Its cost of goods sold was:
A. $(217,000)
B. $375,000
C. $157,500
D. $217,500
E. $532,500
67. A company had expenses other than cost of goods sold of $250,000. Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000.
A. Sales: $350,000; gross profit: $150,000
B. Sales: $350,000; gross profit: $50,000
C. Sales: $500,000; gross profit: $400,000
D. Sales: $500,000; gross profit: $50,000
E. Sales: $400,000; gross profit: $500,000
68. A company had expenses other than cost of goods sold of $51,000. Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.
A. Sales: $136,000; gross profit: $111,000
B. Sales: $136,000; gross profit: $85,000
C. Sales: $85,000; gross profit: $136,000
D. Sales: $111,000; gross profit: $136,000
E. Sales: $60,000; gross profit: $25,000
69. A company had expenses other than cost of goods sold of $175,000. Determine sales and gross profit given cost of goods sold was $622,000 and net loss was ($41,000).
A. Sales: $838,000: gross profit: $216,000
B. Sales: $756,000: gross profit: $134,000
C. Sales: $797,000: gross profit: $756,000
D. Sales: $756,000: gross profit: $797,000
E. Sales: $134,000: gross profit: $216,000
70. Merchandise inventory:
A. Is a long-term asset.
B. Is a current asset.
C. Includes supplies.
D. Is classified with investments on the balance sheet.
E. Must be sold within one month.