Assuming the perpetual inventory system is used, which of the following statements about the multistep income statement is correct?
A.Sales discounts affect the calculation of Gross Profit.
B.Contra-accounts affect the Cost of Goods Sold.
C.Contra-revenue accounts increase Other Expenses.
D.Sales discounts are a Selling, General, and Administrative Expense.
Assuming the perpetual inventory system is used, which of the following statements about the multistep income statement is correct?
A.Sales discounts affect the calculation of Gross Profit.
B.Contra-accounts affect the Cost of Goods Sold.
C.Contra-revenue accounts increase Other Expenses.
D.Sales discounts are a Selling, General, and Administrative Expense.
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Related questions
Match each of the following accounts to the appropriate sectionor subsection of a multiple-step income statement as provided.Sections may be used once, more than once, or not at all.
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Question 10 (15 points)
The following is a partial Adjusted Trial Balance for Alpha Company for the month:
| Alpha Company | ||
| Adjusted Trial Balance (partial) | ||
| January 31, 2016 | ||
| Accounts | Debit | Credit |
| Inventory | $2,750 | |
| Sales | $11,500 | |
| Sales Discounts | 200 | |
| Sales Returns & Allowances | 1,200 | |
| Purchases | 4,000 | |
| Purchases Discounts | 150 | |
| Purchase Returns & Allowances | 450 | |
| Freight In | 50 | |
| Advertising Expense | 150 | |
| Depreciation Expense | 130 | |
| Freight Out | 70 | |
| Income Tax Expense | 500 | |
| Salaries Expense | 550 | |
| Utilities Expense | 100 | |
Additionally, Inventory for December 31, 2015 was $2,600. Prepare a multiple-step income statement.
What amount should Alpha Company report on a Multi-Step Income Statement for the following items:
1. Net Sales
2. Cost of Goods Available for Sales
3. Gross Profit
4. General & Administrative Expenses
5. Income before Taxes
