ELEMENTARY CALCULATIONS TEST BANK
FULL SOLUTION VERIFIED QUESTIONS
AND ANSWERS GUARANTEED TO PASS
●● what type of accounts are sales discounts and sales returns and
allowances?
Answer: contra revenue accounts
●● gross profit calculation
Answer: net sales - COGS
●● COGS calculation
Answer: beginning inventory + purchases - ending inventory
●● Gross profit percentage calculation
Answer: (gross profit / net sales) * 100
●● Goods available for sale calculation
Answer: 1. beginning inventory + purchases
2. COGS + ending inventory
, ●● net income calculation
Answer: gross profit - expenses
●● inventory turnover ratio calculation
Answer: COGS / average inventory
- (higher is better)
- rate of sell
●● average inventory calculation
Answer: (BI + EI) / 2
●● days to sell calculation
Answer: 365 / inventory turnover ratio
- (lower is better)
- age of inventory
●● gross profit margin calculation
Answer: gross profit / net sales
- higher is better
- profitability of inventory
●● receivables turnover ratio calculation