Mid-term Exam (Ch. 1 Ch. 7) instructions Question 20 (of 40) Save & Exit S 20. 3

Question

Mid-term Exam (Ch. 1 Ch. 7) instructions Question 20 (of 40) Save & Exit S 20. 3.00 points A floral shop, which uses a perpetual Inventory systom, solls a vase for $28 which it carried in its inventory at $20. Sales commissions paid to an employee were $1 Which one of the following statements is correct (true)? The gross margin percentage is 40% O The $1 sales commissions would normally be recorded in an expense account O On a multiple step income statement, "Net Sales would be reported at $8 O Cost of goods sold (coGs) is $21. 20 1 8 9 2 3

Explanation / Answer

Question = 1) Answer = Option 2 = The $ 1 Sales Comiission would normally be recorded in an expenses account Question 2) Answer = Option 3 = Retained Earnings Question 3 = Answer = Option 3 = $ 2,000 = $ 1,500 + $ 500 Question 4 = Calculation: Sales = $ 20 X 2 = $ 40 COGS = $ 11 X 2 Unit = $ 22 Answer = Option A = COGS                                               $ 22      Inventory                                                   $ 22 Cash                                                   $ 40              Sales                                                     $ 40

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