Accounting chapter 3

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zzto
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288167
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Accounting chapter 3
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2014-11-04 23:51:01
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Accounting chapter
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Accounting chapter 3
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  1. do work
  2. Merchandising businesses
    • generate revenue by selling goods.
    • include wholesale and retail companies.
  3. How is the balance sheet (not income statement) of a merchandising firm different from the balance sheet of a service business?
    It includes the asset, Merchandise Inventory.
  4. Which of the following would be primarily a merchandising business?
    Bonds Department Store
  5. Retail companies sell goods primarily to
    consumers, not other businesses
  6. Merchandising businesses include
    retail companies and wholesale companies.
  7. Selling and administrative costs are ---------costs.
    period
  8. Costs included in the Merchandise Inventory
    account are
    product costs
  9. Selling and administrative costs are recognized
    ----------in the period incurred
    as expenses
  10. Which of the following is not a period cost?

    A)   Advertising Expense
    B)  Sales Commissions
    C)  Cost of Goods Sold
    • A)   Advertising Expense
    •  B)  Sales Commissions
    •  C)  Cost of Goods Sold
  11. Product costs are also referred to as
    inventory costs.
  12. cost of goods sold is a
    product cost
  13. Product costs are also referred to as
    inventory costs
  14. The Cost of Goods Sold account is classified as:
    an expense.
  15. A perpetual inventory system updates the Merchandise Inventory account for
    all purchases and sales of inventory
  16. With a perpetual inventory system, the cost of goods sold is recognized at
    the time of sale.
  17. With a perpetual inventory system, both ------------- are recognize at the
    time of a sale of goods.
    revenue and an expense
  18. With a perpetual inventory system, the
    balance in the Merchandise Inventory account is adjusted
    • A)  for every purchase of inventory.
    •       B)  every time inventory is sold.
  19. A purchase of merchandise for cash is
    An asset exchange transaction.
  20. A purchase of merchandise on account is
    An asset source transaction.
  21. Asset exchange doesn't include
    claims (ie revenues and expenses)
  22. An entry to record the purchase of inventory on account under the perpetual
    inventory method
    increases  total assets.
  23. During the month of August, Holtz Company incurred selling and administrative expenses
    on account in the amount of $1,800.  What
    kind of transaction is this?
    a claims exchange transaction
  24. An entry to record the purchase of inventory on account under the perpetual
    inventory method
    increases  total assets.
  25. A company’s cost of goods sold for a period equals the beginning inventory plus
    the amount of inventory purchased during the period.
    False, ask about this one?
  26. The ending Merchandise Inventory plus Cost of Goods Sold equals
    • the Cost of Goods
    • Available for Sale during the period.
  27. Gross Margin
    Difference between sales revenue and cost of goods sold; the amount a company makes from selling goods before subtracting operating expenses
  28. number 31??
  29. How to find markup value?
    General Margin (sales-cost of goods sold) / cost of goods sold
  30. Smaller shoddy business= higher gross margin %?
    number 33?
  31. 34 I don't get at all

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