Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

If a company reports net sales of 700,000 pennies for the year, what is the equivalent amount in dollars?

$70,000

$7,000

$70

$700

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Verified step by step guidance

Understand the problem: The company reports net sales in pennies, and the goal is to convert this amount into dollars. Recall that there are 100 pennies in one dollar.

Identify the conversion factor: Since 1 dollar equals 100 pennies, the conversion factor is 1/100 or dividing the total pennies by 100.

Set up the equation: To convert pennies to dollars, divide the total number of pennies (700,000) by 100. This can be expressed mathematically as:

\frac{700000}{100}

Perform the division: Simplify the fraction by dividing 700,000 by 100. This will give the equivalent amount in dollars.

Interpret the result: Once the division is complete, the resulting value represents the net sales in dollars. Compare this value to the provided answer choices to determine the correct one.