iple that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the A. Recognition principle D. Matching principle C. Cash basis of accounting B. Cost prineiple E. Time period principle 14. A company had expenses other than cost of goods sold of S250,000. Determine sales and gross profit given cost of goods sold was $100,000 and net income was $150,000. B. Sales: S350,000; Gross Profit: $50,000 D. Sales: $500,000, Gross Profit: $50,000 A. Sales: $350,000; Gross Profit: $150,000 C. Sales: $500,000; Gross Profit: $400,000 E. Sales:$400,000; Gross Profit: $500,000 S. The current ratio A. Is used to measure a company's profitability B. Is used to measure the relation between assets and long-term debt C. Measures the effect of operating income on profit D. Is used to help evaluate a company's ability to pay its short-term obligations E Is calculated by dividing current assets by equity 16. Merchandise inventory: A. Is reported on the balance sheet as a current asset B. Refers to products a company owns and intends to sell C. Can include the cost of shipping the goods to the store and making them ready for sale D. Does not appear on the balance sheet of a service company E. All of the above 17. The credit terms 2/10, n30 are interpreted as: A. 2% cash discount if the amount is paid within 10 days, with the balance due in 30 days B. 10% cash discount ifthe amount is paid within 2 days, with balance due in 30 days C. 30% discount if paid within 2 days D. 30% discount if paid within 10 days E. 2% discount if paid within 30 days