Chapter 5 - Merchandising Operations

What is the primary source of revenue for a merchandising company?

• Service revenue

• Sales revenue

• Advertising revenue

• Rent revenue

What are the two categories of expenses in a merchandising company?

• Cost of goods sold and operating expenses

• Sales revenue and advertising expenses

• Rent expenses and service revenue

• Operating expenses and cost of goods purchased

Which category of expenses is directly related to the revenue recognized from the sale of goods?

• Cost of goods sold

• Operating expenses

• Advertising expenses

• Rent expenses

Under a perpetual system, where are purchases of merchandise for resale recorded?

• Inventory account

• Sales account

• Advertising account

• Rent account

Which are the components of purchase discounts?

• Percentage amount of the cash discount

• Time period in which the purchaser should pay the full invoice price if the discount is not taken

• Time Period in which the discount is offered

• All of the above

What does FOB destination indicate?

• The buyer takes responsibility for goods when they leave the seller's premises
• The seller is responsible for the goods until they reach the buyer's location
• The buyer is responsible for the goods only until reach their destination

• The seller takes responsibility for goods when they leave the buyer's premises

What does FOB shipping point indicate?

• The buyer takes responsibility for goods when they leave the seller's premises

• The seller is responsible for the goods until they reach the buyer's location

• The buyer is responsible for the goods only until reach their destination

• The seller takes responsibility for goods when they leave the buyer's premises

What is the Cost of Goods Sold Formula?

• Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory

• Cost of Goods Sold = Beginning Inventory - Purchases + Ending Inventory

• Cost of Goods Sold = Purchases - Beginning Inventory + Ending Inventory

• Cost of Goods Sold = Ending Inventory - Beginning Inventory + Purchases

Tags

CCSS.HSS.ID.A.4