Review: Accounting Crash Course Retake Exam v4
REVIEW: ACCOUNTING CRASH COURSE RETAKE EXAM V4 - QUESTIONS
WITH 100% CORRECT ANSWERS | LATEST VERSION 2025 | VERIFIED
Which of the following statements is FALSE?
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Collecting cash after delivery of a good or service does not create revenue on the income
statement on the date of collection.
Revenue is recognized at the time of delivery of the goods or services regardless of if cash is
received.
A liability is created when cash is received prior to delivery of the goods or services. - ANSWER-
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Revenue is recognized at the time of delivery of goods and services regardless of when the cash
is received.
Clayton Corp. has provided the following information:
Gross profit was $620,000;
Cost of goods sold was $380,000;
Net income was $400,000.
What was Clayton's gross profit margin?
40%
61.3%
62%
155% - ANSWER-62%
Gross profit ($620,000) equals sales (X) minus cost of goods sold ($380,000).
Therefore, Sales = Gross profit ($620,000) plus Cost of goods sold ($380,000).
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, Review: Accounting Crash Course Retake Exam v4
Sales = $1,000,000.
Gross profit percentage = Gross profit divided by Sales = $620,000 ÷ $1,000,000 = 62%.
Clayton Corp. has provided the following information:
Operating (excluding COGS) expenses were $345,000;
Operating income was $215,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss on sale of investments was $87,000;
Income tax expense was $58,000.
What was Clayton's gross profit?
$618,000
$469,000
$540,000
$560,000 - ANSWER-$618,000
Gross profit equals net sales less cost of goods sold. The other way to look at it is to work
backwards, realizing that:
Operating income = Net sales - All operating expenses
Since you're given operating income and all operating expenses other than COGS, you can
simply add back operating expenses to operating income to arrive at gross profit:
Gross profit ($560,000) equals operating expenses ($345,000) plus Operating Income
($215,000).
Interest expense is recognized on the income statement below operating income, as are income
taxes and loss on investments, which therefore have no impact on gross profit.
A customer purchased and received $5,000 of goods on credit from Discount Paper Supply on
September 1. The customer received the bill on September 13 and mailed a $5,000 check on
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, Review: Accounting Crash Course Retake Exam v4
September 30. Discount Paper Supply received the check on October 4. On which of the
following dates should Discount Paper Supply record sales revenue?
September 13
October 1
September 1
September 30 - ANSWER-September 1
Sales revenue should be recorded on the date of sale.
Which of the following best describes the objective of depreciation?
To report the asset on the balance sheet at the estimated amount for which the asset could be
sold on the balance sheet date.
To estimate the remaining useful life of the asset.
To allocate the cost of a tangible asset to the periods in which its use contributes to earning
revenue.
To estimate the current market value of the asset. - ANSWER-To estimate the remaining useful
life of the asset.
Depreciation is a process of allocating to expense a portion of a tangible asset's cost in the
period of benefit in which revenue is earned.
During 2018, Clayton Co. reported the following activities:
The company recognized revenues of $10,000 during the period.
The company recognized cost of goods sold of $1,250
The company recognized $4,000 in operating expenses for salaries, rent, utilities, and other
selling, general and administrative expenses.
The company paid taxes in the amount of 25% of pretax income.
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REVIEW: ACCOUNTING CRASH COURSE RETAKE EXAM V4 - QUESTIONS
WITH 100% CORRECT ANSWERS | LATEST VERSION 2025 | VERIFIED
Which of the following statements is FALSE?
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Collecting cash after delivery of a good or service does not create revenue on the income
statement on the date of collection.
Revenue is recognized at the time of delivery of the goods or services regardless of if cash is
received.
A liability is created when cash is received prior to delivery of the goods or services. - ANSWER-
Revenue is not recognized at the time of delivery of goods and services if cash is received after
delivery of the goods and services.
Revenue is recognized at the time of delivery of goods and services regardless of when the cash
is received.
Clayton Corp. has provided the following information:
Gross profit was $620,000;
Cost of goods sold was $380,000;
Net income was $400,000.
What was Clayton's gross profit margin?
40%
61.3%
62%
155% - ANSWER-62%
Gross profit ($620,000) equals sales (X) minus cost of goods sold ($380,000).
Therefore, Sales = Gross profit ($620,000) plus Cost of goods sold ($380,000).
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, Review: Accounting Crash Course Retake Exam v4
Sales = $1,000,000.
Gross profit percentage = Gross profit divided by Sales = $620,000 ÷ $1,000,000 = 62%.
Clayton Corp. has provided the following information:
Operating (excluding COGS) expenses were $345,000;
Operating income was $215,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss on sale of investments was $87,000;
Income tax expense was $58,000.
What was Clayton's gross profit?
$618,000
$469,000
$540,000
$560,000 - ANSWER-$618,000
Gross profit equals net sales less cost of goods sold. The other way to look at it is to work
backwards, realizing that:
Operating income = Net sales - All operating expenses
Since you're given operating income and all operating expenses other than COGS, you can
simply add back operating expenses to operating income to arrive at gross profit:
Gross profit ($560,000) equals operating expenses ($345,000) plus Operating Income
($215,000).
Interest expense is recognized on the income statement below operating income, as are income
taxes and loss on investments, which therefore have no impact on gross profit.
A customer purchased and received $5,000 of goods on credit from Discount Paper Supply on
September 1. The customer received the bill on September 13 and mailed a $5,000 check on
2|Page
, Review: Accounting Crash Course Retake Exam v4
September 30. Discount Paper Supply received the check on October 4. On which of the
following dates should Discount Paper Supply record sales revenue?
September 13
October 1
September 1
September 30 - ANSWER-September 1
Sales revenue should be recorded on the date of sale.
Which of the following best describes the objective of depreciation?
To report the asset on the balance sheet at the estimated amount for which the asset could be
sold on the balance sheet date.
To estimate the remaining useful life of the asset.
To allocate the cost of a tangible asset to the periods in which its use contributes to earning
revenue.
To estimate the current market value of the asset. - ANSWER-To estimate the remaining useful
life of the asset.
Depreciation is a process of allocating to expense a portion of a tangible asset's cost in the
period of benefit in which revenue is earned.
During 2018, Clayton Co. reported the following activities:
The company recognized revenues of $10,000 during the period.
The company recognized cost of goods sold of $1,250
The company recognized $4,000 in operating expenses for salaries, rent, utilities, and other
selling, general and administrative expenses.
The company paid taxes in the amount of 25% of pretax income.
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