Answer the following statement(s) true (T) or false (F)
1. The income statement is the result of operations (revenue and expenses) over a given period of time.
2. Gross profit is determined by subtracting cost of sales from net revenue.
3. The statement of cash flows is an important financial statement but is not currently required of corporations listed on the New York Stock Exchange.
4. The process of examining the logical relationships between various financial statement items is known as ratio analysis.
5. The current ratio and the quick ratio are both liquidity ratios.
1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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The following is from Goldman Inc's 2016 income statement. Purchases $172,000 Transportation-In 11,000 Inventory, January 1, 2016 26,500 Inventory, December 31, 2016 28,800 Purchase Returns and Allowances 8,400 How much will Goldman report as its cost of goods sold in its 2016 income statement?
a. $172,300 b. None of these choices c. $161,500 d. $161,300
The retail industry has been largely unaffected by the trend of the world becoming "flatter."
Indicate whether the statement is true or false
When merchandise is returned to the supplier, the following account is credited:
a. under the periodic system, sales returns and allowances; under the perpetual system, cost of goods sold. b. under the periodic system, merchandise inventory; under the perpetual system, purchases returns and allowances. c. under the periodic system, purchases returns and allowances; under the perpetual system, merchandise inventory. d. under the periodic system, cost of goods sold; under the perpetual system, merchandise inventory. e. under the periodic system, purchases returns and allowances; under the perpetual system, cost of goods sold.
Martha's mother Joan opened a trustee bank account. The designation on the bank account reads, "Joan Williams, as trustee for Martha Williams." This indicates that
A) Joan will manage the funds in this account solely for the benefit of her daughter. B) Martha can presently retrieve funds from the account if she so wishes. C) Martha has no right to the funds in the account while her mother is alive. D) Martha has a right to retrieve funds from the account if her mother is mentally incapacitated.