2
ACCT 2001 Kimberly Peters Exam 2 with || || || || || || ||
accurate detailed solutions || ||
What is the primary source of revenue? - correct answer✔✔sales revenue (sales)
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Retailers - correct answer✔✔directly to cusomers
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Wholesales - correct answer✔✔directly to retailers || || || || ||
COGS - correct answer✔✔total cost of the merchandise sold during the period
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Inventory - correct answer✔✔added account for a merchandising company (current assets)
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Which generally takes more time? - correct answer✔✔merchandising
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Ending Inventory - correct answer✔✔good not sold at end of period
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What two inventory systems do companies use to account for inventory? - correct
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answer✔✔perpetual and periodic || ||
Perpetual - correct answer✔✔1. maintains records of costs of inventory purchases and sales
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2. records continuously show inventory on hand
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3. company determines COGS every time sale occurs
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Periodic - correct answer✔✔1. Do NOT keep detailed records of the goods on hand
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2. Cost of goods sold determined by count at the end of the accounting period
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, 2
FOB - correct answer✔✔Free on Board
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FOB shipping point - correct answer✔✔buyer pays freight costs
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FOB destination - correct answer✔✔seller pays ownership passes at destination
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Equation to Gross Profit - correct answer✔✔(sales - sales returns and allowances - sales
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discounts) / net sales - COGS || || || || ||
Balance Sheet: - correct answer✔✔includes an inventory account (current asset)
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Income Statement: - correct answer✔✔most prefer a multi step income statement
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Single Step Income Statements have: - correct answer✔✔2 categories:
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1. revenue
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2. expenses
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Multi Step Income Statements have: - correct answer✔✔Gross profit
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Income from operations || ||
Income before income taxes || || || ||
Net income
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What component is only used in a multiple step income statement? - correct answer✔✔income
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from operations
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What are the three important line items of a multiple step income statement? - correct
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answer✔✔1. Gross profit || ||
2. Income from operations->sustainable
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ACCT 2001 Kimberly Peters Exam 2 with || || || || || || ||
accurate detailed solutions || ||
What is the primary source of revenue? - correct answer✔✔sales revenue (sales)
|| || || || || || || || || || ||
Retailers - correct answer✔✔directly to cusomers
|| || || || ||
Wholesales - correct answer✔✔directly to retailers || || || || ||
COGS - correct answer✔✔total cost of the merchandise sold during the period
|| || || || || || || || || || ||
Inventory - correct answer✔✔added account for a merchandising company (current assets)
|| || || || || || || || || ||
Which generally takes more time? - correct answer✔✔merchandising
|| || || || || || ||
Ending Inventory - correct answer✔✔good not sold at end of period
|| || || || || || || || || ||
What two inventory systems do companies use to account for inventory? - correct
|| || || || || || || || || || || || ||
answer✔✔perpetual and periodic || ||
Perpetual - correct answer✔✔1. maintains records of costs of inventory purchases and sales
|| || || || || || || || || || || ||
2. records continuously show inventory on hand
|| || || || || || ||
3. company determines COGS every time sale occurs
|| || || || || || ||
Periodic - correct answer✔✔1. Do NOT keep detailed records of the goods on hand
|| || || || || || || || || || || || ||
2. Cost of goods sold determined by count at the end of the accounting period
|| || || || || || || || || || || || || ||
, 2
FOB - correct answer✔✔Free on Board
|| || || || ||
FOB shipping point - correct answer✔✔buyer pays freight costs
|| || || || || || || ||
FOB destination - correct answer✔✔seller pays ownership passes at destination
|| || || || || || || || ||
Equation to Gross Profit - correct answer✔✔(sales - sales returns and allowances - sales
|| || || || || || || || || || || || || ||
discounts) / net sales - COGS || || || || ||
Balance Sheet: - correct answer✔✔includes an inventory account (current asset)
|| || || || || || || || ||
Income Statement: - correct answer✔✔most prefer a multi step income statement
|| || || || || || || || || ||
Single Step Income Statements have: - correct answer✔✔2 categories:
|| || || || || || || ||
1. revenue
||
2. expenses
||
Multi Step Income Statements have: - correct answer✔✔Gross profit
|| || || || || || || ||
Income from operations || ||
Income before income taxes || || || ||
Net income
||
What component is only used in a multiple step income statement? - correct answer✔✔income
|| || || || || || || || || || || || || ||
from operations
||
What are the three important line items of a multiple step income statement? - correct
|| || || || || || || || || || || || || || ||
answer✔✔1. Gross profit || ||
2. Income from operations->sustainable
|| || ||
