Gross profit does not appear 1) on a merchandising company income statement. 2)

Question

Gross profit does not appear 1) on a merchandising company income statement. 2) on a service company income statement. 3) to be relevant in analyzing the operation of,a merchandising company. 4) on the income statement if the periodic inventory system is used because it cannot be calculated. Save Question 7 (166 points) a A sales invoice is used as documentation for a journal entry that requires a debit to 1) Cash and a credit to Sales Revenue 2) Sales Returns and Allowances and a credit to Accounts Receivable. 3) Accounts Receivable and a credit to Sales Revenue. 4) Cash and a credit to Sales Returns and Allowances Save

Explanation / Answer

1) Gross profit is not used in service company

so answer is 2) on a service company income statement

2) A sales invoice is used in documentation for

so answer is 3) Account receivable and a credit to sales revenue

3) account receivable turnover is used for average collection period.

so answer is 2) can be used to compute the average collection period

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