Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
11) The following information relates to Sports Bikes, Inc.
Net Sales Revenue
$216,000
Cost of Goods Sold
160,000
Interest Revenue
10,000
Operating Expenses
40,000
Calculate the operating income.
A) $16,000
B) $68,000
C) $240,000
D) $26,000
12) The following information relates to Blake Auto Supply.
Net Sales Revenue
$215,000
Cost of Goods Sold
150,000
Interest Revenue
11,000
Operating Expenses
42,500
Calculate the net income of Blake Auto Supply.
A) $22,500
B) $33,500
C) $76,500
D) $240,000
13) Which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step
income statement?
A) selling expense
B) cost of goods sold
C) sales discounts
D) all of the above
14) On a multi-step income statement, the operating expenses are subtracted from ________ to arrive at
operating income.
A) net sales
B) cost of goods sold
C) net profit
D) gross profit
15) On a multi-step income statement, which of the following is added to operating income to arrive at
net income?
A) sales revenue
B) interest expense
C) sales discounts forfeited
D) operating expenses
16) Which of the following is the correct order of subtotals that appear on a multi-step income statement?
A) Operating income, Gross profit, Net income
B) Gross profit, Net sales revenue, Net income
C) Net income, Operating income, Net income
D) Gross profit, Operating income, Net income
17) Which of the following is shown on a multi-step income statement but not on a single-step income
statement?
A) gross profit
B) net sales revenue
C) cost of goods sold
D) net income
18) Gross profit is calculated as ________.
A) sales revenue less sales discounts and allowances
B) sales revenue less operating expenses
C) net sales revenue less sales discounts
D) net sales revenue less cost of goods sold
19) Gross profit represents the mark-up on ________.
A) sales revenue
B) merchandise inventory
C) operating expenses
D) transportation cost
20) Net sales revenue is calculated by ________.
A) subtracting cost of goods sold from sales revenue
B) subtracting sales discounts and selling expenses from sales revenue
C) adding sales discounts and sales returns and allowances to sales revenue
D) subtracting sales discounts and estimated sales returns and allowances from sales revenue
21) Refer to the following trial balance.
Debit
Credit
Cash
$19,000
Accounts Receivable
40,000
Merchandise Inventory
62,000
Supplies
17,000
Land
310,000
Accounts Payable
$3,000
Notes Payable
25,000
Common Stock
354,000
Retained Earnings
21,000
Dividends
6,000
Sales Revenue
433,000
Cost of Goods Sold
240,000
Salaries Expense
15,000
Utilities Expense
67,000
Rent Expense
55,000
Interest Expense
5,000
________
Totals
$836,000
$836,000
How much is the gross profit?
A) $193,000
B) $56,000
C) $51,000
D) $45,000
22) Bargain Merchandisers has the following transactions for the month of July.
Net Sales Revenue
$419,000
Cost of Goods Sold
310,000
Operating Expenses
80,000
Interest Revenue
6,000
Calculate Gross Profit.
A) $29,000
B) $109,000
C) $35,000
D) $23,000
23) On November 1, 2019, Alpha Omega, Inc. sold merchandise for $18,000, FOB destination, with
payment terms, n/30. The cost of goods sold was $5,580. On November 3, the customer returns on this
sale amounted to $7,200. The company received the balance on November 9, 2019. Calculate the gross
profit from these transactions.
A) $2,232
B) $7,452
C) $5,580
D) $3,348
24) On November 1, 2019, Alpha Omega, Inc. sold merchandise for $15,000, FOB destination, with
payment terms, n/30. The cost of goods sold was $5,100. On November 3, the customer returns on this
sale amounted to $6,000. The company received the balance on November 9, 2019. Calculate the cost of
goods sold from these transactions.
A) $2,040
B) $5,940
C) $5,100
D) $3,060
25) Weston Jewelers uses the perpetual inventory system. On April 2, Weston sold merchandise with a
cost of $1,257 for $2,200 to a customer on account with the terms 3/15, n/30. Weston paid $125 for delivery
of the merchandise. Calculate the amount of net sales revenue. (Round any intermediary calculations and
your final answer to the nearest dollar.)
A) $2,325
B) $2,200
C) $2,134
D) $1,257
26) Refer to the following trial balance.
Debit
Credit
Cash
$6,000
Accounts Receivable
15,000
Inventory
20,000
Supplies
4,000
Land
120,000
Accounts Payable
$6,000
Notes Payable
22,000
Common Stock
81,000
Retained Earnings
12,000
Dividends
3,000
Sales Revenue
180,000
Sales Discounts Forfeited
4,000
Cost of Goods Sold
81,000
Delivery Expense
6,000
Salaries Expense
5,000
Utilities Expense
23,000
Rent Expense
20,000
Interest Expense
2,000
________
Totals
$305,000
$305,000
How much is the gross profit?
A) $103,000
B) $95,000
C) $97,000
D) $99,000
27) High Quality Jewelers uses the perpetual inventory system. On March 3, High Quality sold
merchandise for $55,000 to a customer on account with terms 4/15, n/30. The cost of goods sold was
$22,000. On March 18, High Quality received payment from the customer. Calculate the amount of gross
profit.
A) $52,800
B) $33,000
C) $30,800
D) $22,000
28) In a multi-step income statement, which of the following items is excluded from the calculation of
operating income?
A) gross profit
B) interest expense
C) selling expense
D) administrative expense
29) Expenses that fall outside the regular operations of a business are ________.
A) generally a substantial part of net income
B) recorded in the Retained Earnings account
C) included under the other income and expenses section of the income statement
D) not considered for the calculation of net income
30) From the following details, calculate net sales revenue.
Sales Revenue
$460,000
Sales Discounts Forfeited
7,000
Cost of Goods Sold
260,000
Operating Expenses
75,000
Interest Revenue
8,000
A) $467,000
B) $453,000
C) $460,000
D) $475,000
