Question

1. The abbreviation "FOB stands for (a) free on board. freight on board. free only (10) buyer. (d) freight charge on buyer. 2. Which one of the following would not appear on a single-step income statement? Dross profit benses o sales revenues (d) cost of goods sold 3. The credit terms offered by a company are 2/10, n/30, which means that (a) the customer must pay the bill within 10 days. the customer can deduct a 2% discount if the bill is paid between 10 days and 30 days from the invoice date. (c) the customer can deduct a 2 discount if the bill is paid within 10 days of the invoice date dh two sales returns can be made within 10 days of the invoice date and no returns thereafter. 4. Generally, the revenue account for a merchandising company is called (a) Sales Revenue or Sales. (b) Investment Revenue. (s) Gross Profit (d) Net Sales. 5. Profit margin is a measure of (a) liquidity. profitability. (c) solvency. (d) comparability. t 6. If goods in transit are shipped FOB destination, Al the seller has legal title to the goods until they are delivered. he buyer has legal title to the goods during transit. g he transportation company has legal title to the goods while the goods are in transit. no one has legal title to the goods until they are delivered. N 7 To accurately determine inventory quantities, a company must (a) use the perpetual inventory system. o employ an independent company to conduct inventory counts. (c) rely on the warehouse records. (d) take a physical inventory. 8. For 2018, Superplus Inc. reported $48,000 beginning inventory and $52,000 ending inventory Net sales were $320,000 and gross profit was $110,000 for the same period. Based on these gures, inventory turnover for 2018 was @ 3.4 times. ( 44.2 times. (c) 6.4 times (d) 9.2 times. The inventory turnover ratio is calculated by dividing cost of goods sold by (a) beginning inventory. (b) ending inventory. Caverage inventory. Taj 365 days.

Answer 1

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