TRUE OR FALSE1. Cost of goods sold is an operating expense.2. Gross profit is equal to net sales plus cost of goods sold.3. Net sales is equal to sales revenue plus sales returns and minus salesdiscounts.4. Credit terms of 3/15, n/30 means the purchaser can deduct 3% of theinvoice price if paid within 15 days.5. FOB shipping point means title to the goods passes to the purchaser uponreceipt of the goods and the seller is responsible for the cost of the freight.6. In the closing entry process, the sales returns and allowances account isdebited.28. If the ownership of merchandise passes to the buyer when the se.delivers the merchandise for shipment, the terms are stated as FOBdestination.29. The abbreviation FOB stands for Free On Board.30. If the buyer bears the transportation costs related to a purchase, the termsare said to be FOB destination.31. The seller may prepay the transportation costs even though the terms areFOB shipping point.32. Title to merchandise shipped FOB shipping point passes to the buyer upondelivery of the merchandise to the buyer's place of business.33. Purchased goods in transit should be included in the ending inventory if thegoods were shipped FOB shipping point.34. Purchased goods in transit, shipped FOB destination, should be excludedfrom ending inventory.35. The accounts Purchases, Purchases Returns and Allowances, PurchasesDiscounts, and Transportation in are found on the balance sheet.

Cost of goods sold means the difference between the cost of goods available for sales and closing…

Answered: TRUE OR FALSE 1. Cost of goods sold is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The accounting principle upon which deferrals and accruals are based is Oa. conservatism Ob. matching Oc. price-level adjustment Od. cost
True or False: Gross profit is equal to the gross profit margin multiplied by the net sales. Select one: O True O False 4
Gross profit is: The amount left over after cost of goods sold is subtracted from net sales. A.Net sales less operating expenses. B.Sales less sales discount. C.less sales discounts. D.Net sales less selling expenses
Lopez Corporation incurred the following costs while manufacturing its product. Materials used in product Depreciation on plant Property taxes on store Labor costs of assembly-line workers Factory supplies used $121,000 61,000 7,600 111,000 24,000 Advertising expense Property taxes on plant Delivery expense Sales commissions Salaries paid to sales clerks $46,000 15,000 22,000 36,000 51,000 Work in process inventory was $13,000 at January 1 and $16,600 at December 31. Finished goods inventory was $61,000 at January 1 and $45,700 at December 31.
In the economic order quantity model the return on capital that is forgotten when it is invested in inventory is a/an a. Carrying costs b. Exclusion in the EOQ computation c. Irrelevant cost d. Order cost
Cost of goods sold divided by variable cost equals units. O True False
Activity 1: Sales revenue should be recognized when goods and services have been supplied; costs are incurred when goods and services have been received. Which accounting concept governs the above? A.The substance over form concept B.The materiality concept C.The accrual concept D. The historical cost concept
7
3. As product costs expire(expensed), they become part of a. selling expenses. b. inventory. C. cost of goods sold. d. sales revenue.
Which of the following statements correctly complete the sentence:"Gross Margin equals":I. sales revenue less (minus) cost of goods sold.II. contribution margin less (minus) fixed costs.III. operating income plus all period costs.IV. sales revenue less (minus) cost of goods manufactured.

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TRUE OR FALSE 1. Cost of goods sold is an operating expense.