Question

1. In order for revenue to be recognized, it must be both _______________________ and ________________________.

2. Net sales less cost of goods sold equals ____________________________________.

3. Another term for income from operations is called ____________________________, and is calculated by taking gross profit less operating expenses.

4. Gross sales less sales discounts and sales returns & allowances are called ___________________________, and represent the revenues resulting from selling a product or service.

5. The most significant expense for most manufacturing companies and merchandising companies is called ___________________________________.

6. The calculation for gross margin (profit) ratio is ________________________________.

7. Expenses, other than cost of goods sold, that are incurred in the day-to-day activities of the entity are called ___________________________________.

8. _______________________ is the excess of revenues & gains over expenses & losses.

9. FOB _______________________ means title passes from seller to buyer when the merchandise being shipped arrives at its destination.

10. FOB _______________________ means title passes from seller to buyer when the merchandise being shipped leaves the seller’s premises.

Answer 1

1. In order for revenue to be recognized, it must be both ___Earned____________________ and _realized or realizable_______________________.

1. Net sales less cost of goods sold equals __Gross margin______________________________.

1. Another term for income from operations is called ____Operating income_________, and is calculated by taking gross profit less operating expenses.

1. Gross sales less sales discounts and sales returns & allowances are called _____Net sales____________, and represent the revenues resulting from selling a product or service.

1. The most significant expense for most manufacturing companies and merchandising companies is called ____Cost of goods sold_______________________________.

1. The calculation for gross margin (profit) ratio is ____(Net sales - cost of goods sold) / Net sales X 100____________________________.

1. Expenses, other than cost of goods sold, that are incurred in the day-to-day activities of the entity are called ____Operating expenses_______________________________.

1. __Net income_____________________ is the excess of revenues & gains over expenses & losses.

1. FOB ___Destination____________________ means title passes from seller to buyer when the merchandise being shipped arrives at its destination.

1. FOB ____shipping___________________ means title passes from seller to buyer when the merchandise being shipped leaves the seller’s premises.

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