SELF-STUDY QUESTIONS
MERCHANDISE
1 The major expense of merchandising business is …
a. Cost of good sold c. rent
b. depreciation d. interest

2 Sales total $440,000, cost of goods sold is $210,000 and operating expense are $160,000. how
much is gross margin..?
a.$440,000 c. $210,000
b. $230,000 d, $70,000

3 A Purchase discount results from :
a. returning goods to the seller
b. receiving a purchase allowance from the seller
c. buying a large enough quantity of merchandise to get the discount
d. payaing with the discount period

4 which one of the following pairs includes items that are the most smiliar ?
a. purchase discounts and purchase returns
b. cost of goods sol and inventory
c. net sales and sales discounts
d, sales returns and sales allowances

5 which of the following that is not an account ?
a. sales revenue c. inventory
b. net sales d. supplies expense

6 cost of goods sold is computed by adding beginning inventory and net purchase and
substacting X, what is X ?
a. net sales c. ending inventory
b. sales discounts d. net purchases

7 which account causes the main difference between a merchandiser's adjusting and closing
process and that of a service busines>?
a. advertising expense c. Inventory
b. Interest revenue d. accounts receivable

8 The Major item on a merchandiser's income statement that a service business does not have is…
a. Cost of goods sold c. net purchases
b. Inventory d. net sales

9 the clossing entry for sales discounts is
a. sales discounts c. Income summary
Income summary sales discounts
b. Sales discounts d. Not use becouse sales discount is a permanent
sales revenue account, which is not closed

10 Which is income statement format report income from operations
a. account format c. single step format
b. Report format d. multiple-step fomat