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Book Cover
Financial and Managerial Accounting: The Basis for Business Decisions, 12/e
Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Accounting for Merchandising Activities

True/False Quiz

Please answer all questions



1

The income statement of a wholesaler includes a deduction from revenue representing the cost of goods sold.
A)True
B)False
2

In a perpetual inventory system, every credit sale affects the balances of at least four general ledger accounts.
A)True
B)False
3

A company that sells a low volume of high-cost merchandise is more likely to use a perpetual inventory system than is a company that sells a high volume of low-cost merchandise.
A)True
B)False
4

The gross profit rate is equal to net sales expressed as a percentage of average total assets.
A)True
B)False