Accounting Quiz_Chapter 5_IBT_MCU

A company has sales of $739,200 and cost of goods sold of $296,200. Its gross profit equals:

• $(443,000).

• $739,200.

• $296,200.

• $443,000.

• $1,035,400.

Merchandise inventory refers to products that a company owns and plans to sell to customers.

• True

• False

A company purchased $2,300 of merchandise on July 5 with terms 1/10, n/30. On July 7, it returned $250 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:

• $250.

• $2,027.

• $2,030.

• $2,050.

• $2,300.

A company had net sales of $545,000 and cost of goods sold of $345,000. Its gross margin equals $890,000.

• True

• False

A company's current assets are $20,350, its quick assets are $11,440 and its current liabilities are $13,000. Its quick ratio equals:

• 0.88.

• 1.14.

• 1.56.

• 1.78.

• 2.45.

A company purchased $3,800 worth of merchandise. Transportation costs were an additional $330. The company returned $260 worth of merchandise and then paid the invoice within the 2% cash discount period. The total cost of this merchandise is:

• $3,730.00.

• $3,626.00.

• $3,794.00.

• $3,799.20.

• $3,870.00.

A merchandising company's operating cycle begins with the purchase of merchandise and ends with the collection of cash from the sale.

• True

• False

Garza Company had sales of $140,200, sales discounts of $2,100, and sales returns of $3,365. Garza Company's net sales equals:

• $5,465.

• $134,735.

• $138,100.

• $140,200.

• $145,665.

Beginning inventory plus net purchases equals merchandise available for sale.

• True

• False

A company has net sales of $814,100 and cost of goods sold of $588,100. Its net profit is $32,410. The company's gross margin and operating expenses, respectively, are:

• $226,000 and $193,590

• $226,000 and $258,880

• $555,690 and $258,880

• $258,880 and $555,690

• $781,220 and $193,590