The primary source of revenue for a wholesaler is A) investment income. B) servi

Question

The primary source of revenue for a wholesaler is A) investment income. B) service revenue. C) the sale of merchandise. D) the sale of plant assets the company owns. 28. 29. Inventory becomes part of cost of goods sold when a company A) pays for the inventory. B) purchases the inventory. C) sells the inventory. D) receives payment from the customer. 30. Which of the following is not one of the main factors that contribute to fraudulent activity? A) Opportunity. B) Incompatible duties. C) Financial pressure. D) Rationalization. 31. Depreciation is a process of A) asset devaluation. B) cost accumulation. C) cost allocation. D) asset valuation. 32. The interest charged on a $90,000 note payable, at the rate of 6%, on a 90-day note would be A) $5,400. B) $2,700. c) $1,350. D) $900 33. A company purchased land for $350,000 cash. Real estate brokers' commission was S25,000 and $35,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at A) $385,000. B) $350,000. C) $375,000. D) $410,000. Version I Page 6

Explanation / Answer

28) The correct option is C) the sale of merchandise

Wholeseller is the person who buys the quantity of goods in bulk and sells them. Hence the primary source of revenue for a wholeseller is the sale of merchandise.

29) Inventory becomes part of cost of goods sold when a firm C) Sell the inventory.

As name suggest, Cost of Goods SOld, the inventory becomes cost of goods sold on sale of the same.

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