Question

1.Merchandising businesses generate revenue by selling goods. include wholesale and retail companies. manufacture the goods that they sell. generate revenue by selling goods and include wholesale and retail companies.

2. A retail company sells goods primarily to other businesses. manufacturing firms. the final consumer. other businesses and the final consumer.

3.Merchandising businesses manufacture the goods they sell. generate revenue primarily by providing services to customers. buy the merchandise they sell from suppliers. include dry cleaning companies and law firms.

4.A discount given to encourage prompt payment on a credit purchase of merchandise is called: a cash discount. a sales discount by the seller. a purchase discount by the buyer. all of these are correct.

5. On January 1, 2014 Morgan Co. purchased a truck that cost $32,000. The truck had an expected useful life of 10 years and a $5,000 salvage value. The amount of depreciation expense recognized in 2015 assuming that Morgan uses the double declining-balance method is: $4,320. $5,120. $5,400. $6,400.

Answer 1

1.Merchandising businesses generate revenue by

Ans: Option ( D)

Generate revenue by selling goods and include wholesale and retail companies.

( merchandising = they sell the product which they buy from another suppliers. They sold goods to both wholesale and retail companies, so ( D) is correct choice.)

2.A retail company sells goods primarily to

Ans: C. the final consumer

( retailer means dealing with one to one customer, so option ( c) final customer is correct choice.)

3.3.Merchandising businesses

Ans: C. buy the merchandise they sell from suppliers.

( merchandising business do not manfacture the products, but buy it from other suppliers.)

4.A discount given to encourage prompt payment on a credit purchase of merchandise is called

Ans: ( D) All of these are correct.

( a discount offered by a seller to encourage early payment by a buyer; to the seller, referred to as a sales discount; to the buyer, referred to as the purchases discount.)

5. $ 5,120

Explanation:

1) Rate of DeP:

= 1/ 10 ×2 × 100 =20%

2) 2014 Dep:

= 32000 × 20% = $6400

3) 2015 Dep:

( $ 32000 - 6400) ×20%= $ 5120