Table of contents

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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following transactions would typically result in an ordinary gain or loss when calculating net sales?

Sale of a company vehicle used for five years

Issuance of common stock above par value

Sale of inventory at a price different from its cost

Revaluation of land to fair market value

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of ordinary gain or loss. Ordinary gains or losses typically arise from transactions that are part of a company's normal business operations, such as the sale of inventory. These are included in the calculation of net sales.

Step 2: Analyze the transaction 'Sale of a company vehicle used for five years.' This transaction is related to fixed assets and would result in a gain or loss classified as non-operating, not ordinary, because it is not part of the company's core business operations.

Step 3: Examine the transaction 'Issuance of common stock above par value.' This transaction is related to equity financing and does not result in a gain or loss. It is not part of the calculation of net sales.

Step 4: Evaluate the transaction 'Sale of inventory at a price different from its cost.' This transaction directly relates to the company's core business operations and would result in an ordinary gain or loss, as inventory sales are part of net sales calculations.

Step 5: Consider the transaction 'Revaluation of land to fair market value.' This transaction involves adjusting the value of an asset and does not result in a gain or loss that affects net sales. It is typically recorded in other comprehensive income or equity, depending on accounting standards.