Accounting G10 Q4

What is Freight-In recorded for?

• Expense for delivering goods to customers
• Transportation cost incurred for purchasing goods
• Depreciation on fixed assets
• Profit from selling goods

What formula helps determine the effective sales revenue after returns, allowances, and discounts?

• Net Sales = Gross Sales - Sales Returns and Allowances - Sales Discounts
• Net Sales = Gross Sales + Sales Returns and Allowances
• Net Sales = Gross Sales + Sales Discounts
• Net Sales = Gross Sales - Sales Returns

Which of the following is an example of depreciation?

• Decrease in the value of machinery
• Increase in the value of land
• Cost of purchasing goods for resale
• Interest expense on borrowed funds

What is the main purpose of a merchandising business?

• To buy goods for resale and earn a profit from selling them
• To provide services to customers
• To produce goods for resale
• To invest in stocks and bonds

What does the provision for bad debts adjustment calculate?

• The adjustment needed for bad debts
• The total revenue from sales
• The total depreciation of assets
• The cost of goods sold

In the provision for depreciation, which of the following is allocated over the asset's useful life?

• Depreciation expense
• Depreciable cost
• Cost of goods sold
• Net income

What does the accumulated depreciation account represent?

• The amount of new depreciation expense added this year
• The total depreciation expense recognized from the asset's acquisition to the current period
• The total cost of the asset
• The current market value of the asset

Which of the following is NOT a column found in a 10-column worksheet?

• Trial Balance
• Adjustments
• Depreciation Expense
• Balance Sheet

What does the current ratio measure?

• A company's ability to cover short-term liabilities with short-term assets
• The relationship between borrowed funds and owner's equity
• The company's long-term profitability
• The liquidity of non-current assets

What is the quick ratio a more conservative measure of?

• A company's ability to cover short-term liabilities with all assets
• A company's ability to cover short-term liabilities excluding inventory
• A company's ability to generate net sales
• A company's ability to pay long-term liabilities