Summary Quiz on Income StatementVersión en línea Test your accounting knowledge with this quiz on the trading account. por Claudia Bedward 1 What is the key difference between return inwards and return outwards? a Return inwards are goods purchased from suppliers, while return outwards are goods sold to customers. b Return inwards are goods returned to suppliers, while return outwards are goods returned by customers. c Return inwards are goods sold to customers, while return outwards are goods purchased from suppliers. d Return inwards are goods returned by customers, while return outwards are goods returned to suppliers. 2 How does opening and closing inventory differ in accounting? a Opening refers to the final inventory at the end of a period, while closing is the initial inventory at the start of a period. b Opening refers to the net profit at the end of a period, while closing is the gross profit at the start of a period. c Opening refers to the purchases made during a period, while closing is the sales made during a period. d Opening refers to the initial inventory at the start of a period, while closing is the final inventory at the end of a period. 3 What distinguishes carriage inward from carriage outward? a Carriage inward is the transportation cost of goods sold, while carriage outward is the transportation cost of goods purchased. b Carriage inward is the cost of goods sold, while carriage outward is the cost of goods purchased. c Carriage inward is the cost of goods returned by customers, while carriage outward is the cost of goods returned to suppliers. d Carriage inward is the transportation cost of goods purchased, while carriage outward is the transportation cost of goods sold. 4 How is net sales calculated in accounting? a Net sales = Gross sales - Sales returns - Sales allowances + Sales discounts. b Net sales = Gross sales + Sales returns + Sales allowances + Sales discounts. c Net sales = Gross sales - Sales returns + Sales allowances - Sales discounts. d Net sales = Gross sales - Sales returns. 5 What is the formula for calculating net purchases in accounting? a Net purchases = purchase + carriage inwards - returns outwards. b Purchases = Opening inventory + Net purchases + Closing inventory. c Purchases = Opening inventory - Net purchases - Closing inventory. d Purchases = Opening inventory - Net purchases + Closing inventory. 6 How is the cost of goods sold determined in accounting? a Cost of goods sold = Opening inventory + Purchases - Closing inventory. b Cost of goods sold = Opening inventory + Purchases + Closing inventory. c Cost of goods sold = Opening inventory - Purchases - Closing inventory. d Cost of goods sold = Opening inventory - Purchases + Closing inventory. 7 What does gross profit represent in accounting? a Gross profit = Net sales - Cost of goods sold. b Gross profit = Net sales - Cost of goods sold + Expenses. c Gross profit = Net sales + Cost of goods sold. d Gross profit = Net sales - Cost of goods sold - Expenses.
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