Reviewer
Reviewer
Reviewer
I. ntification : The illustration shows the normal operating cycle of the merchandising
business. Complete the process according to its sequence. (2points each)
2.___________
1________ 3___________
4___________
I. TRUE OR FALSE
______________1. Merchandise inventory end of the previous calendar year will be the beginning
inventory of the current year.
______________2. Cost of sales is also the total cost of goods available for sale.
______________3. Purchases deducted with Purchase discounts and returns will result in the Gross
purchase.
______________4. Freight out is added to the total purchase before deducting the discounts and
returns.
______________5. Total sales is also the sales revenue.
______________6. Adding merchandise inventory end of the previous year and the net purchases
will result to the total goods available for sale.
______________7. Total goods available for sale less Cost of sales will result to the amount of
merchandise inventory end of the current year.
______________8. Cost of goods sold and cost of goods available for sale are not the same.
______________9. Merchandise inventory end are the goods that remained unsold.
______________10. Merchandising is easier than service business in terms income preparation.
______________11. Net Profit means the company’s resources has increased which will also give
rise to increase in the Capital.
_____________12. Net loss means that the company’ resources has decreased which will also
decrease the Capital.
_____________13. The higher the amount of the cost of sales, the lesser the ending inventory will
be.
_____________14. The higher the merchandise inventory beginning will result in higher goods
available for sale.
_____________15. The higher the amount of operating expenses the lower the profit will be.
REVIEWER ONLY
II. PROBLEM SOLVING: Carefully read each problem. Answer the requirement, show
your computation, avoid erasure. DOUBLE RULE your final answer. Good luck, do your
best.