Question

QUESTION 37

1. In credit terms of 3/15, n/45, the "3" represents the

   		number of days in the discount period
   		full amount of the invoice
   		number of days when the entire amount is due
   		percent of the cash discount

5 points   

QUESTION 38

1. If the seller is to pay the freight costs of delivering merchandise, the delivery terms are stated as

   		FOB shipping point
   		FOB destination
   		FOB n/30
   		FOB seller

5 points   

QUESTION 39

1. Multiple-step income statements show

   		gross profit but not income from operations
   		neither gross profit nor income from operations
   		both gross profit and income from operations
   		income from operations but not gross profit

5 points   

QUESTION 40

1. A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

   		$970
   		$650
   		$300
   		$620

Answer 1

37. option D is correct.

n credit terms of 3/15, n/45, the "3" represents the percentage of cash discount. It means the buyer will receive 3% discount if the bill is paid within 15 days from invoice date.

38.Option B is correct.

free on board Destination term means that the buyer takes the delivery of goods being shipped to it by a supplier once the goods arrive at the buyers receiving dock.

39.Option C is correct.

Multiple-step income statements shows both gross profit and income from operations.It segregates the operating revenues and operating expenses from the non operating revenues ,non operating expenses,gains and losses.

40.Option B is correct.

The cost of merchandise sold = opening stock +purchases - closing stock.

The cost of merchandise sold = 175+365-160

The cost of merchandise sold =$650