300.000-45.000=255.000 Net Sales 

255.000-152.000=103.000 Gross Profit

Specific Identification Method is an inventory costing method based on the specific cost of particular units of inventory.

Balance sheet reports the assets, liabilities and the owner’s equity in a specific date. In other words, balance sheet provides information about the financial position of the company.

Bad debt expense is an income statement account that shows the losses incurred due to uncollectible receivables. The correct answer is B.

according to the definition, the dotted place should be like (A)

A bank reconciliation which is a statement that explains the differences between the balance shown on the bank statement and the one shown on the business’s accounting records.

Dotted line should be bad debt expense

Promissory note is a written agreement or a commitment to pay a particular amount of promised money at a particular period of time.

Cash discounts are intended to encourage the customer to make their payment earlier. The correct answer is B.

Fraud is an intentional misrepresentation of some items.

Internal control has five components: control environment, risk assessment, control activities, information and communication, and monitoring activities.

Management has the responsibility to constitute and maintain effective controls in a business entity.

These companies purchase the goods that are ready to be sold and sell them to generate revenue. Considering the type of their customers, merchandising companies are called either as retailer or whole seller.

Closing Entries for Revenue Accounts, Closing Entries for Expense Accounts, Closing the Income Summary Account.

Factoring is the business of purchasing receivables from companies upon a fee for the services performed to manage and collect receivables. The correct answer is D.

When the companies purchase merchandise inventory to resell, it is an expenditure. All expenditures that the companies incur until the goods become ready to be sold are included in the cost of merchandise inventory. That cost is kept in the balance sheet until the goods are sold. When they are sold, the cost in balance sheet is transferred to income statement as an expense (COGS). The correct choice is E.

Some types of services, such as insurance, are normally paid for before they are used. As you learned before, these prepayments are deferrals. Rent, interest, salaries, wages, utilities, etc. are the other examples of accrued expenses over time. Expenses incurred but not yet paid or recorded at the end of the accounting period are accrued expenses. Accrued expenses are the ones that are firstly incurred and not recorded as an expense until a future accounting period.

Receivable is an accounting term associated with the amounts that are owed to the business by other parties, mainly its customers.

Operating cycle begins with the purchase of merchandise inventory and ends when the cash from sales is collected from customers.

Purchase returns exist when sellers allow purchasers to return merchandise that is defective, damaged, or under-performing.