Yesterday Company Has a Sales Budget for Next Month of $300,000.Cost

question 32

Multiple Choice

Yesterday Company has a sales budget for next month of $300,000.Cost of goods sold is expected to be 40% of sales.All units are paid for in the month following purchase.The beginning inventory is $10,000 and an ending inventory of $12,000 is desired.Beginning accounts payable is $76,000.The purchases for next month are ________.

• A)$78,000
• B)$118,000
• C)$120,000
• D)$122,000

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Definitions:

Unearned Revenue

Money received by a company for goods or services that have yet to be provided to the customer.

Accrued Wages

Salaries or wages that have been earned by employees but have not yet been paid by the company.

Net Income

What a company ultimately earns in profit once expenses and taxes are removed from its total income.

Adjusting Entries

Journal entries made in the accounting records to correct or update financial information before the preparation of financial statements.