Reference no: EM132604211

Question 1: Which of the following statements about gross profit and/or net income is true?

Select one:

a. Net income is usually larger than gross profit

b. Gross profit is the difference between sales and cost of goods sold

c. Gross profit and net income can be found on the balance sheet

d. Net income is the difference between sales and cost of goods sold

Question 2: The gross profit margin for four companies was calculated as shown below. Select the company with the most desirable gross profit margin.

Select one:

a. Company D has a gross profit margin of 35%

b. Company A has a gross profit margin of 20%

c. Company B has a gross profit margin of 25%

d. Company C has a gross profit margin of 30%

Question 3: What is the purpose of setting up a petty cash fund?

Select one:

a. to pay for small, incidental expenses

b. to pay for all expenses

c. to allow cash for personal use

d. to pay for regular operating expenses

Question 4: The entry to record the expenses paid for with petty cash is:

Select one:

a. debit cash, credit petty cash

b. debit petty cash, credit expenses

c. debit expenses, credit cash

d. debit expenses, credit petty cash

Question 5: The amount of outstanding deposits is included on the bank reconciliation as a/an:

Select one:

a. addition to the bank statement

b. deduction from the balance of the company's records

c. addition to the balance of the company's records

d. deduction from the bank statement