Reference no: EM132556769

Question 1: Purchases Returns and Allowances

a. decrease net income.

b. increase net income.

c. increase accounts payable.

d. Not enough information provided.

Question 2: What inventory method is used when the inventory balance is updated only at the end of the accounting period?

a. Periodic

b. Perpetual

c. Income Summary

d. Cost of Goods Sold

Question 3: When using a periodic inventory method, what account is increased when you buy merchandise inventory?

a. Cost of Goods Sold

b. Beginning Inventory

c. Supplies

d. Purchases

Question 4: Cost of Goods Sold equals

a. Beginning Inventory + Net Purchases + Freight-in + Freight-out + Ending Inventory.

b. Beginning Inventory - Net Purchases - Freight-in + Ending Inventory.

c. Beginning Inventory + Net Purchases + Freight-in - Ending Inventory.

d. Beginning Inventory - Net Purchases + Freight-in + Ending Inventory.

Question 5: Net Income equals

a. Net Sales - Cost of goods sold - Operating expenses.

b. Gross Profit - Operating expenses.

c. Sales - Sales Returns & Allowances - Sales Discount - Cost of goods sold - Operating Expenses.

d. All of the above are correct.