Acc 557 Wk 5 Chapter 5,6 Quiz - All Poss

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ACC 557 WK 5 Chapter 5,6 Quiz - All Possible Questions

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ACC 557 WK 5 Chapter 5,6 Quiz - All Possible Questions



    1.     Retailers and wholesalers are both considered merchandisers.


    2.     The steps in the accounting cycle are different for a merchandising company than for a service company.



    3.     Sales minus operating expenses equals gross profit.



    4.     Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.



    5.     A periodic inventory system requires a detailed inventory record of inventory items.



    6.     Freight terms of FOB Destination means that the seller pays the freight costs.



    7.     Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.



    8.     Sales revenues are earned during the period cash is collected from the buyer.



    9.     The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.



  10.     The revenue recognition principle applies to merchandisers by recognizing sales revenues when they are earned.



  11.     Sales Allowances and Sales Discounts are both designed to encourage customers to pay their accounts promptly.



  12.     To grant a customer a sales return, the seller credits Sales Returns and Allowances.


  13.     A company's unadjusted balance in Inventory will usually not agree with the actual amount of inventory on hand at year-end.


  14.     For a merchandising company, all accounts that affect the determination of income are closed to the Income Summary account.



  15.     A merchandising company has different types of adjusting entries than a service company.



  16.     Nonoperating activities exclude revenues and expenses that...