Question 1: The amount of salable merchandise a company buys during the period is called
a. beginning inventory.
b. purchases.
c. goods available for sale.
d. ending inventory.
Question 2: Cost of goods sold is computed by
a. begnning inventory plus purchaes.
b. goods available for sale less beginning inventory.
c. beginning inventory less purchases plus ending inventory.
d. goods available for sale less ending inventory.
Question 3: All goods available for sale become
a. the cost of goods sold.
b. ending inventory.
c. either cost of goods sold or ending inventory.
d. neither cost of goods sold nor ending inventory.
Question 4: The amount of goods on hand to sell at the start of the income statement period is the
a. purchases.
b. goods available for sale.
c. beginning merchandise inventory.
d. ending merchandise inventory.
Question 5: Regarding the statement of cash flows, operating activities connected with accounting for inventory include
a. cash received from customers for sales.
b. cash payment to suppliers for merchandise.
c. credit sales of merchandise.
d. answers a and b are both correct.