Reference no: EM132795610

Problem 1: Gross margin equals the difference between net sales and

a. cost of goods sold.

b. cost of goods sold plus operating expenses,

c. operating expenses,

d. profit.

Problem 2: Which of the following goods would not be included in merchandise inventory for purchasing entity?

a. Goods in transit shipped FOB destination

b. Goods in transit shipped FOB shipping point 

c. Goods on hand in the showroom

d. Goods ordered and received from the supplier

Problem 3: An amount deducted from the catalog price for an item of merchandise is called a

a. customer discount,

b. purchases discount.

c. sales discount,

d. trade discount.

Problem 4: Under the Perpetual inventory system, which of the following counts would not be used?

a. Cost of Goods Sold

b. Merchandise Inventory

c. Purchases

d. Sales