Question 1

The operating revenue remaining after cost of merchandise sold has been deducted is

Accepted Answer

Gross profit is the operating revenue remaining after the cost of merchandise sold has been deducted. It is calculated by subtracting the cost of goods sold (COGS) from total sales revenue.

Question 2

The income from operations is calculated by subtracting operating expenses from

Accepted Answer

Income from operations is calculated by subtracting operating expenses from gross profit. Gross profit is derived from net sales minus the cost of merchandise sold.

Question 3

One way to increase gross profit is to

Accepted Answer

Increasing sales revenue directly contributes to an increase in gross profit, as gross profit is calculated by subtracting the cost of goods sold from total sales revenue.

Question 4

A financial statement that reports the amount of dividends is

Accepted Answer

A statement of stockholders' equity reports the changes in equity for a period, including dividends paid, which are not typically reported on the income statement or balance sheet.

Question 5

The financial statement that reports the par value of the stock is

Accepted Answer

The answer of The financial statement that reports the par...

Question 6

The total original price of all merchandise sold during a fiscal period is called

Accepted Answer

The terms "cost of merchandise sold," "cost of goods sold," and "cost of sales" are often used interchangeably to refer to the total original price of all merchandise sold during a fiscal period.

Question 7

Preparing financial statements that provide information about a business's financial condition, changes in this financial condition, and the progress of operations is an application of the accounting concept

Accepted Answer

Adequate Disclosure is the accounting concept that involves preparing financial statements to provide comprehensive information about a business's financial condition, changes in this financial condition, and the progress of its operations. This ensures that all relevant financial information is disclosed to users, allowing them to make informed decisions.

Question 8

In the accounting cycle, closing entries are journalized and posted

Accepted Answer

Closing entries are journalized and posted after the financial statements are prepared to close temporary accounts and prepare for the next accounting period.

Quiz 16: Financial Statements and Closing Entries