Chapter 06 Accounting 26e Carl Warren James M Reeve Jonathan Duchac

Chapter 06 Accounting 26e Carl Warren James M Reeve Jonathan Duchac

 

Complete Chapter Questions With Answers

 

Sample Questions Are Posted Below

 

1. The most important differences between a service business and a retail business are reflected in their operating cycles and financial statements.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.06-01 – 06-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.03 – Business Forms

ACCT.ACBSP.APC.17 – Inventories Reporting ACCT.AICPA.BB.01 – Industry

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

2. In a merchandise business, sales minus operating expenses equal net income.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.06-01 – 06-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.09 – Financial Statements

ACCT.ACBSP.APC.17 – Inventories Reporting ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

3. Cost of merchandise sold is the amount that the merchandising company pays for the merchandise it intends to sell.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Moderate

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.06-01 – 06-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.06 – Recording Transactions

ACCT.ACBSP.APC.17 – Inventories Reporting ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

4. Service businesses provide services for income, while a merchandising business sells merchandise.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.06-01 – 06-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.03 – Business Forms

ACCT.ACBSP.APC.17 – Inventories Reporting ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

5. In retail businesses, inventory is reported as a current asset.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.06-01 – 06-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.17 – Inventories Reporting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic