Wendell's Bicycles Store Buys Bicycles on Average for $500 and Sells

question 190

Multiple Choice

Wendell's Bicycles store buys bicycles on average for $500 and sells them on average for $800.He pays a sales commission of 10% of sales revenue to his sales staff.Wendell pays $1,500 a month rent for his store,and also pays $3,000 a month to his staff in addition to the commissions.Wendell sold 100 bicycles in June.
-If Wendell prepares a traditional income statement for the month of June,what would be his gross profit?

• A)$130,000
• B)$ 80,000
• C)$ 30,000
• D)$ 50,000

Identify the terms and implications of using promissory notes in transactions.

Distinguish between various methods of handling accounts receivable, including aging, factoring, and pledging.

Apply the expense recognition principle in the context of accounting for bad debts.

Recognize the materiality constraint and its application in financial accounting.

---

Definitions:

Node of Ranvier

Gaps in the myelin sheath of nerve fibers where the axon is exposed, enabling rapid transmission of nerve impulses.

Neural Impulses

Electrical signals that travel along neurons, conveying information throughout the nervous system.

Axon

A thin, elongated extension of a neuron that usually transmits electrical signals from the neuron's cell body outward.

Dendrite

The branched projections of a neuron that act to conduct the electrochemical stimulation received from other neural cells to the body, or soma, of the neuron from which the dendrites project.