Answered: Gross income derived from business…

Gross income derived from business shall be equivalent to gross sales less sales returns, discount and allowances, but undiminished of cost of goods sold. a.true b.false

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 20MC: A multi-step income statement ________. A. separates cost of goods sold from operating expenses B....

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Gross income derived from business shall be equivalent to gross sales less sales
returns, discount and allowances, but undiminished of cost of goods sold.

a.true

b.false

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Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). a. Utilities Expense b. Advertising Expense c. Purchases Discounts d. Sales Returns and Allowances e. Interest Income f. Freight In g. Depreciation Expense, Equipment h. Interest Expense i. Rent Expense j. Sales
A multi-step income statement ________. A. separates cost of goods sold from operating expenses B. considers interest revenue an operating activity C. is another name for a simple income statement D. combines cost of goods sold and operating expenses
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Which of the following represents the components of the income statement for a merchandising business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Sales Revenue - Cost of Goods Manufactured = gross profit D. Service Revenue - Cost of Goods Purchased = gross profit
Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.
Gross income derived from business shall be equivalent to gross sales less sales returns, discount and allowances, but undiminished of cost of goods sold. TRUE OR FALSE?
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Gross profit is the difference between: Select one: a. revenues and expenses. b. net income and operating income. c. gross sales and sales discounts. d. Net sales and cost of goods sold.
Which of the following statement is False for a Simple-Step Income Statement? a. Total expenses cannot be calculated b. Net Sales can be calculated c. Net Profit can be calculated d. Cost of goods sold will be taken under total expenses
To arrive at gross profit, cost of goods sold is subtracted from the total of sales minus sales returns plus sales discounts True False
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