Acct 2301 Exam 2

What is the formula for net sales

• Gross Profit - Expenses

• Net Sales - COGS

• Gross Sales - Returns - Allowances - Discounts

• Beginning Inventory +Cost of Goods Purchased

What is the formula for Net Income

• Revenues - Expenses

• Net Sales - COGS

• Gross Sales - Returns - Allowances - Discounts

• Beginning Inventory +Cost of Goods Purchased

What is the formula for COGS

• Beginning Inventory + Purchases - Ending Inventory

• Net Sales - COGS

• Gross Sales - Returns - Allowances - Discounts

• Beginning Inventory +Cost of Goods Purchased

What is the formula for Gross Margin Ratio

• Beginning Inventory + Purchases - Ending Inventory

• (Net Sales - COGS)/ Net sales * 100

• Gross Sales - Returns - Allowances - Discounts

• Beginning Inventory + Cost of Goods Purchased

What is the formula for Shrinkage

• Beginning Inventory + Purchases - Ending Inventory

• (Net Sales - COGS)/ Net sales * 100

• Gross Sales - Returns - Allowances - Discounts

• Beginning Inventory + Purchases - Sales - Inventory on hand

What is the formula for Gross Profit

• Beginning Inventory + Purchases - Ending Inventory

• (Net Sales - COGS)/ Net sales * 100

• Net Sales - COGS

• Beginning Inventory + Purchases - Sales - Inventory on hand

What is the formula for Weighted Avg

• Beginning Inventory + Purchases - Ending Inventory

• Total Cost of Inventory / Total Units of Inventory

• Net Sales - COGS

• Beginning Inventory + Purchases - Sales - Inventory on hand

Which of the following costs should be added to the buyer's Inventory account?

• Freight-out with terms FOB destination

• Freight-in with terms FOB shipping point

• Freight-in with terms FOB destination

If a seller sells its merchandise with the shipping terms FOB destination, it credits

Revenue when the merchandise is _______.

• a. paid for by the customer.

• b. ordered by the customer.

• c. received by the customer.

• d. shipped from the seller's place of business.

When costs to purchase inventory are rising, using LIFO leads to reporting ______ cost

of goods sold and ______ net income than FIFO.

• a. higher; lower

• b. higher; higher

• c. lower; higher

• d. lower; lower