Richard's Sporting Goods Reports Net Income of $100,000,net Sales of $500,000,and

question 19

Multiple Choice

Richard's Sporting Goods reports net income of $100,000,net sales of $500,000,and average assets of $1,000,000.The profit margin is:

• A)10%.
• B)20%.
• C)50%.
• D)5 times.

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Definitions:

Expense Account

An account used to track expenditures or costs incurred by a business or an individual for operational purposes.

Asset Account

An account that tracks resources owned or controlled by a business or individual which have economic value.

Unearned Items

Income received for goods not yet delivered or services not yet provided, considered a liability until the goods or services are delivered.

Adjusting Journal Entry

Adjusting journal entries are made in the accounting records to correct or allocate transactions in the appropriate accounting period for accurate financial reporting.