Using the following accounts, classify each of them as part of cost of sales (COS), selling expense (SE), administrative expense (AE) or finance cost (FC). 1. Depreciation Expense – Office Equipment 2. Freight In 3. Rent Expense – Warehouse 4. Sales Discount 5. Taxes & Licenses 6. Freight Out 7. Pag-ibig Premium Expense 8. Sales Returns & Allowances 9. Commission Expenses 10. Purchase Discount 11. Interest Expense 12. Rent Expense – Admin Office

Using the following accounts, classify each of them as part of cost of sales (COS), selling expense (SE), administrative expense (AE) or finance cost (FC). 1. Depreciation Expense – Office Equipment 2. Freight In 3. Rent Expense – Warehouse 4. Sales Discount 5. Taxes & Licenses 6. Freight Out 7. Pag-ibig Premium Expense 8. Sales Returns & Allowances 9. Commission Expenses 10. Purchase Discount 11. Interest Expense 12. Rent Expense – Admin Office

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 21MC: Which of the following accounts would be reported under operating expenses on a multi-step income...

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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
Selling Expenses and General and Administrative Expenses Operating expenses are subdivided between selling expenses and general and administrative expenses when a multiple-step income statement is prepared. Identify each of the following items as a selling expense (S) or general and administrative expense (G$A). ______ 1. Advertising expense ______ 2. Depreciation expenseâ€”store furniture and fixtures ______ 3. Office rent expense ______ 4. Office salaries expense ______ 5. Store rent expense ______ 6. Store salaries expense ______ 7. Insurance expense ______ 8. Supplies expense ______ 9. Utilities expense
Which of the following accounts would be reported under operating expenses on a multi-step income statement? A. sales B. advertising expense C. sales returns and allowances D. interest expense
For each of the following accounts, identify whether the normal balance is a debit or a credit. Also specify whether the account is a contra account. a. Sales Returns and Allowances b. Merchandise Inventory c. Sales d. d Freight In e. Purchases Returns and Allowances f. Sales Tax Payable g. Purchases
In the income statement, Freight-In is (a) added to purchases. (b) subtracted from purchases. (c) added to sales. (d) subtracted from cost of goods.
Use the first-in, first-out method (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for B75 Company, considering the following transactions.
Which of the following is an example of a contra revenue account? A. sales B. merchandise inventory C. sales discounts D. accounts payable
The following is select account information for August Sundries. Sales: $850,360; Sales Returns and Allowances: $148,550; COGS: $300,840; Operating Expenses: $45,770; Sales Discounts: $231,820. If August Sundries uses a multi-step income statement format, what is their gross margin?
Identify items missing in determining cost of goods sold For (a) through (e), identify the items designated by X and Y. A. Purchases (X + Y) = Net purchases B. Net purchases + X = Cost of inventory purchased C. Inventory (beginning) + Cost of inventory purchased = X D. Inventory available for sale X = Cost of inventory before estimated returns E. Cost of goods sold before estimated returns X = Cost of goods sold
Merchandise Accounting Merchandise Inventory Raw materials Work in process Finished goods Gross profit Net sales Sales revenue Cost of goods available for sale Cost of goods sold Perpetual system Periodic system Transportation-In Purchases FOB destination point FOB shipping point Gross profit ratio An adjunct account used to record freight costs paid by the buyer. A system in which the Inventory account is increased at the time of each purchase and decreased at the time of each sale. Terms that require the seller to pay for the cost of shipping the merchandise to the buyer. Terms that require the buyer to pay for the shipping costs. A system in which the Inventory account is updated only at the end of the period. Beginning inventory plus cost of goods purchased. An account used in a periodic inventory system to record acquisitions of merchandise. Sales revenue less sales returns and allowances and sales discounts. Cost of goods available for sale minus ending inventory. Gross profit divided by net sales. Net sales less cost of goods sold. The cost of unfinished products in a manufacturing company. The account wholesalers and retailers use to report inventory held for sale. The inventory of a manufacturer before the addition of any direct labor or manufacturing overhead. A manufacturers inventory that is complete and ready for sale. A representation of the inflow of assets from the sale of a product.
Which of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods sold