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Chapter 4: Accounting for Merchandising Operations

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Financial & Managerial Accounting
Pages: 168 - 225

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79 Questions for Chapter 4: Accounting for Merchandising Operations

  1. What is the difference between the single-step and multiple-step income statement formats?

    Found on Page 205
  2. Refer to QS 4-9 and prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage that is made to solve QS 4-9.

    Found on Page 207
  3. Refer to the balance sheet and income statement for Apple in Appendix A. What does the company title its inventory account? Does the company present a detailed calculation of its cost of goods sold?

    Found on Page 205
  4. For each item below, indicate whether the statement describes a multiple-step income statement or a single-step income statement.

    Found on Page 207
  5. Refer to Google’s income statement in Appendix A. What title does it use for the cost of goods sold?

    Found on Page 205
  6. Use the following information on current assets and current liabilities to compute and interpret the acid-test ratio. Explain what the acid-test ratio of a company measures.

    Found on Page 207
  7. Refer to the income statement for Samsung in Appendix A. What does Samsung title its cost of goods sold account?

    Found on Page 205
  8. Identify similarities and differences between the acid-test ratio and the current ratio. Compare and describe how the two ratios reflect a company’s ability to meet its current obligations.

    Found on Page 207
  9. Refer to the income statement of Samsung in Appendix A. Does its income statement report a gross profit figure? If yes, what is the amount?

    Found on Page 205
  10. Compute net sales, gross profit, and the gross margin ratio for each separate case a through d. Interpret the gross margin ratio for case a.

    Found on Page 208

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