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About this document
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- 3 pages
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- $3 one-time, yours to keep
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- Format
- Subject
- Accounting
- Module
- Week 3 · Week 3
This quiz covers the operating cycle of service and merchandising companies, journal entries for sales in a perpetual inventory system, and the calculation of cost of goods sold and gross profit. It is for Week 3 of the ACC290 course.
What's inside
- Operating cycle of service and merchandising companies
- Journal entries for sales in a perpetual inventory system
- Calculation of cost of goods sold
- Calculation of gross profit
- Periodic and perpetual inventory systems
Who it is for: Students taking the ACC290 course. (Undergraduate)
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Summary
The operating cycle of a merchandising company is compared to that of a service company. A student gets practice in recording sales and calculating profits and margins in both perpetual and periodic inventory systems.
Operating Cycles
Operating cycles of merchandising companies and service companies are compared. The correct answer to a multiple-choice question is explained.
Recording Sales
Recording sales in a perpetual inventory system is explained. A correct answer to a multiple-choice question is explained.
Calculating Profit
Calculating cost of goods sold and gross profit is explained. A correct answer to a multiple-choice question is explained.
Periodic Inventory System
The periodic inventory system is described. A correct answer to a multiple-choice question is explained.
Key terms
- Operating cycle
- The time it takes for a company to turn its inventory into cash.
- Perpetual inventory system
- A system where the cost of merchandise sold is recorded on the date of the sale.
- Periodic inventory system
- A system where the cost of merchandise sold is determined at the end of the accounting period.
- Cost of goods sold
- The direct costs of producing the goods sold by a company.
- Gross profit
- Sales revenue less cost of goods sold.
- Profit margin
- Net income divided by net sales.
Questions this document helps with
- How do operating cycles differ between merchandising and service companies?
- How are sales recorded in a perpetual inventory system?
- How is cost of goods sold calculated in a periodic inventory system?
Summary written with AI from the document's text.
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