Week 3 questions

1) The operating cycle of a merchandising company is ordinarily shorter than that of a service company

2) The operating cycle of a merchandising company is ordinarily ___________________ that of a service firm.

3) Which statement is true when recording the sale of goods for cash in a perpetual inventory system?

4) Net income is $15,000, operating expenses are $20,000, and net sales total $75,000. How much is cost of goods sold?

5) Which one of the following will result in gross profit?

6) Under what system is cost of goods sold determined at the end of an accounting period?

7) Net income is $15,000, operating expenses are $20,000, net sales total $75,000, and sales revenues total $95,000. How much is the profit margin?

8) In a periodic inventory system, when is the cost of the merchandise sold determined?

9) Waymon Co. has net sales of $100,000, cost of goods sold of $70,000, and operating expenses of $18,000. What is its gross profit?

10) Masie Ascot believes revenues from credit sales may be recorded before they are collected in cash. Do you agree? Explain.