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Cost of goods sold and Cost of goods manufactured are same

True/False Quiz
6-1. When merchandise inventory is purchased with credit terms of
2/10, n/60, the credit period is 60 days from date of the invoice.

True
False

6-2. Merchandise purchased on June 8 with credit terms of 2/10,


n/30, must be paid sooner than with credit terms of n/10 EOM.

True
False

6-3. Under the periodic inventory system, inventory shrinkage, theft,


and spoilage are accounted for in a special account.

True
False

6-4. An inventory system in which the business has up-to-date data


as to the quantity of goods on hand is called a periodic inventory
system.

True
False

6-5. A deduction allowed from the invoice price of goods if payment is


made within a specified period of time is called a trade discount.

True
False

6-6. Merchandise with a list price of $100, subject to a trade discount


of 40 percent and sold with credit terms of 2/10, n/60, would cost the
buyer $58.80 if payment is made within the discount period.
True
False

6-7. When goods are shipped under freight terms of FOB shipping
point (FOB factory), the buyer of the goods pays the freight charges.

True
False

6-8. When a return of merchandise requires the buyer to notify the


seller of the reduction in the invoice due to the return, the
memorandum sent by the buyer is called a debit memorandum.

True
False

6-9. The cost of goods sold is determined by adding the cost of


purchases to the beginning merchandise inventory and subtracting
the ending merchandise inventory.

True
False

6-10. An income statement in which the details of the cost of goods


sold are shown is called a single-step income statement.

True
False

6-11. In a periodic inventory system, transportation charges for


merchandise are added to net purchases to determine the cost of
goods purchased.

True
False

6-12. In a perpetual inventory system, transportation charges are


recorded with a debit to the merchandise inventory account.
True
False

6-13. Transportation-In, Freight-In, and Delivery Expense are all the


same account.

True
False

6-14. Under a periodic system with inventory included in the closing


entry procedure, the Credit column of the Income Statement columns
of the work sheet will likely contain more than revenue account
balances.

True
False

6-15. The purpose of including the Merchandise Inventory account (a


real account) in the closing procedure is to close the beginning
balance to the Income Summary account and enter the unsold
balance in the Merchandise Inventory account (periodic system).

True
False