Business Fundamentals
This type of business sells a skill or action rather than physical products.
What is a service business?
This is the total amount of all sales made by a business before any deductions.
Sales
This account is added to Purchases to reflect the cost of shipping goods into the business.
What is Transportation In?
This is calculated by subtracting the Cost of Merchandise Sold from Net Sales.
What is Gross Profit on Sales?
This Italian city houses Michelangelo's David.
Florence
This type of business sells physical products to customers.
These two "contra-revenue" accounts are subtracted from Sales to find Net Sales.
What are Sales Discounts and Sales Returns and Allowances?
(Purchases + Transportation In) - (Purchases Discounts + Purchases Returns and Allowances) equals this figure.
net purchases
Gross Profit represents the profit made before these types of expenses are deducted.
What are operating expenses?
Nearly all fossils are preserved in this type of rock.
Sedimentary
A merchandising income statement is expanded to include this many distinct sections.
What is five?
This term represents the actual revenue earned after subtracting contra-revenue accounts.
net sales
Adding Beginning Inventory to Net Purchases gives you this total.
What is the Cost of Merchandise Available for Sale?
This value is calculated by subtracting Total Operating Expenses from Gross Profit.
What is Operating Income?
Walt Whitman called this "the beautiful uncut hair of graves".
grass
List three of the five sections of a merchandising income statement
What are Revenue, Cost of Merchandise Sold, Gross Profit on Sales, Operating Expenses, or Net Income?
Use this formula to calculate Net Sales.
What is Sales - (Sales Discounts + Sales Returns and Allowances)?
To find the final Cost of Merchandise Sold, you must subtract this from the Cost of Merchandise Available for Sale.
What is Ending Inventory?
This is the final profit after federal corporate income taxes have been deducted.
What is Net Income?
This city was destroyed in 79 CE due to the eruption of Mount Vesuvius.
Pompeii
True or False: A merchandising income statement is identical to a service business income statement.
What is False?
Calculate Net Sales for a company with $100,000 in Sales, $4,000 in Sales Discounts, and $2,000 in Sales Returns and Allowances.
94,000
If Beginning Inventory is $60,000 and Net Purchases are $140,000, calculate the Cost of Merchandise Available for Sale.
200,000
To increase Gross Profit without raising sales prices, a manager should find a way to reduce this major cost category.
What is the Cost of Merchandise Sold?
Of all the planets in our solar system, this is the only one that rotates clockwise on its axis.
venus