What is the order of the subtotals that appear on a multi-step income statement? Gross Profit, Operating Income, Net Income, Other Revenues and Expenses.

When companies use a perpetual inventory system the recording of the purchase of inventory will include a debit to purchases?

Under the perpetual inventory system, a company purchases merchandise on terms 2/10, n/30. The entry to record the purchase will include a debit to Cash and a credit to Sales. If the perpetual inventory system is used, the merchandise inventory account is debited for purchases of merchandise.

Which of the following accounts will not be found on the cost of merchandise sold section on the income statement?

Which of the following accounts will NOT be found in the Cost of Merchandise Sold section on the income statement? sales less (sales discounts and sales returns and allowances) less cost of merchandise sold.

When a company uses a perpetual inventory system the recording of the purchase?

When companies use a perpetual inventory system, the recording of the purchase of inventory will include a debit to purchases. Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45.

Why is it important to track inventory from the point of ordering to the point of selling?

When you know exactly what inventory you have and where it is stored, you can retrieve it promptly and fill customer orders efficiently. The ability to deal with inquiries and fill orders quickly means the company is able to serve more customers and move more inventory through the company, resulting in higher profit.

Which of the following is an example of an administrative expense?

Wages and benefits to certain employees, such as accounting and IT staff, are considered administrative expenses. Building leases, insurance, subscriptions, utilities and office supplies may be classified as a general expense or administrative expense.

What is the purpose of stock records?

The stock record displays the name of the real and beneficial owner, the number of shares, and the locations of all securities held by the firm. The stock record is updated every time a trade is executed.

What is the significance of having a good inventory system in a business?

Better Inventory Planning and Ordering Striking a balance between the demand and supply is extremely crucial for businesses, thus, inventory management provides aid in better planning and ordering of stock items. Imagine having a huge demand for a particular product but not having enough material to supply the same.