Answer general questions about merchandisers. E5.1 (LO 1), C Mr. Etemadi has prepared the following list of statements about service companies and merchandisers. 1. Measuring net income for a merchandiser is conceptually the same as for a service company. 2. For a merchandiser, sales less operating expenses is called gross profit. 3. For a merchandiser, the primary source of revenue is the sale of inventory. 4. Sales salaries and wages is an example of an operating expense. 5. The operating cycle of a merchandiser is the same as that of a service company. 6. In a perpetual inventory system, no detailed inventory records of goods on hand are maintained in the Inventory account. 7. In a periodic inventory system, the cost of goods sold is determined only at the end of the reporting period. 8. A periodic inventory system provides better control over inventories than a perpetual system. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.

Answer general questions about merchandisers. E5.1 (LO 1), C Mr. Etemadi has prepared the following list of statements about service companies and merchandisers. 1. Measuring net income for a merchandiser is conceptually the same as for a service company. 2. For a merchandiser, sales less operating expenses is called gross profit. 3. For a merchandiser, the primary source of revenue is the sale of inventory. 4. Sales salaries and wages is an example of an operating expense. 5. The operating cycle of a merchandiser is the same as that of a service company. 6. In a perpetual inventory system, no detailed inventory records of goods on hand are maintained in the Inventory account. 7. In a periodic inventory system, the cost of goods sold is determined only at the end of the reporting period. 8. A periodic inventory system provides better control over inventories than a perpetual system. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E

See similar textbooks

Similar questions

Directions: Read the given sentences carefully. Select the best answer from the choices given below. Write your answer on the space provided before each item. (1 point each) Gains Gross Profit Sales Discount Selling expenses Net Income Sales return Service Income Professional Fee Purchases Sales Income Operating expenses Cost of Goods Sold 1. An example of service revenue. 2. The revenue generated from the sale of products. 3. It is computed by deducting the cost of sales from net sales. 4. It is used to describe revenue derived from the rendering of services. 5. A type of income derived from the other activities of the business. 6. The account used to report the acquisitions of merchandise for sale.bnuo1o 7. It represents the actual cost of inventories that the company was able to sell. 8. These are expenses that are directly related to the main purpose of a merchandising business. boinag 9. A contra-sales account that is used to report the amount of discount given to or taken by the…
Please solve the following question. Using the accounts below, prepare a basic Income Statement. All accounts will be used once. Use the example below to help with the solution Cost of Goods Sold General & Admininstrative Expense Interest Expense Net Sales Revenue Net Sales COGS Selling Expense Wages Expense Gross Profit or Margin Operating Expenses: Selling Exp General & Admininstrative Exp Research & Development Exp Insurance Exp Here an example of this type of question that you can use to help with the solution Income Statement For Year Ending Dec. 31, 2022 Wages Exp Depreciation, Amortization, & Depletion Exp Total Operating Expenses Operating Income Other Income/Loss: Interest Income Gain on Sale of Asset Loss on Sale of Asset Interest Expense Income before Taxes Income Tax Expense $ $ $ $ $ $ Net Income 22,000 15,000 2,200 100,000 $ 10,000 5,000 $1,000,000 (450,000) 550,000 15,000 225,000 5,000 7,500 85,000 20,000 357,500 192,500 20,000 5,000 (5,000) (10,000) 202,500 (142,500)…
Select all that apply Determine which of the following statements below regarding a merchandiser are correct. (Check all that apply.) 1. Merchandisers are also identified as wholesalers. 2. Wholesalers only sell services to customers. 3. Merchandisers are often identified as retailers. 4. A merchandiser earns net income by buying and selling merchandise.
4. What is the difference between the SCI of a service entity from a merchandising entity? 5. What is the formula in computing Net Income (Loss) for Service Entities? 6. What is the formula in computing Net Sales? 7. What is the formula in computing Cost of Goods Sold?
This is about accounting in merchandising business. Thanks! 1. How much is the cost of goods sold? 2. How much is the gross profit? 3. How much is the net income?
Assuming that Merchandise business use simple step income statement. Which of the following will be correct result of Net Income by the business? a. Total expenses will be divided by Total revenue b. Total revenue will be multiplied by cost of goods sold c. Total Expenses will be deducted from Total Revenue d. Total Revenue will be deducted from Total expenses
1) What type of account is Cost of Goods Sold? What statment does it appear on? Is it a Real or Nominal account? Is it temporary? Is it a CR or DR balance.2) I have read on the internet that it is an expense, however looking at my workbook showing the Income Statement it is lilsted under Sales & Revenues and added together to obtain Gross Profit.
Which of the following statement is False for Multi-step income statement of a merchandise business? a. It helps in analyzing how well the company is performing b. It divides the expenses into Selling, General and administration expenses c. Users can see how much expense is incurred in selling the product and how much is in administering business d. It divides operating expense into Direct and Indirect expenses.
llar unless stated otherwise. E5-18 Using accounting vocabulary Match the accounting terms with the corresponding definitions. Learn 1. Credit Terms a. The cost of the merchandise inventory that the business has sold to customers. 2. FOB Destination b. An amount granted to the purchaser as an incentive to keep goods that are not "as ordered." c. A type of merchandiser that buys merchandise either from a manufacturer or a wholesaler and then sells those goods to 3. Invoice 4. Cost of Goods Sold 5. Purchase Allowance consumers. d. A situation in which the buyer takes ownership (title) at the delivery destination point. e. A type of merchandiser that buys goods from manufacturers and then sells them to retailers. 6. FOB Shipping Point 7. Wholesaler 8. Purchase Discount f. A discount that businesses offer to purchasers as an incentive for early payment. 9. Retailer g. A situation in which the buyer takes title to the goods after the goods leave the seller's place of business. h. The terms…
(True or False?) The income statement for a retailer shows both gross profit and profit.
Which account does a merchandiser use that a service company does not use? a. Cost of Goods Sold b. Merchandise Inventory c. Sales Revenue d. All of the above
I have a couple of questions. PLEASE answer thoroughly and explain.1) Are all types of revenue accounts listed on the Income Statement only? And are they always temporary accounts with a credit balance? Do ALL of them affect only RE or do revenues affect other statements and accounts. If so what are they and how do they affect them?2) What role does Cost of Goods Sold play? What is it and why is it listed under Sales and Labor Revenue and deducted from Sales and Labor Revenue? Will there always be a Cost of Goods Sold on the Income Statement. How do you arrive at Gross Profit on the Income Statement if there is not a Cost of Goods Sold? What other accounts if any does Cost of Goods Sold affect? Can you give me an example of Cost of Goods Sold?3) Do expenses like revenues appear only on the Income Statement? What other accounts do they affect, if any? Are they credit balances as well? . Do expenses affect only the RE and are they debited or credited to RE?3)How do you…