X Co$.$ purchased $$2,000$ of inventory on account. This inventory was sold for $$3,000$ cash. The

amount of gross margin reported on the income statement and the amount of net cash inflow from

operating activities reported on the statement of cash flows would be

r$.$ $$3,\frac{000}{\text{\$}}1,000.$

$($b$)$ $$1,\frac{000}{\text{\$}}3,000.$

c$.$ $$1,\frac{000}{\text{\$}}-0-$

d$.$ $$-0\frac{-}{\text{\$}}1,000.$

Which of the following is not a period cost?

Advertising cost.

Salary of the company president.

c$.$ Goods purchased for resale.

d$.$ Interest paid on a company note.

Which of the following statements is true?

The product costs associated with inventory are expensed when the inventory is purchased.

k$.$ Administrative salaries are product costs.

c$.$ All period costs are expensed in the period they are incurred.

Product costs are initially recorded as assets.

RST Company paid $$500$ cash for freight costs to have merchandise inventory delivered to its

customers. Which of the following illustrates how this event affects RST$\text{'}$s financial statements?

STU Company experienced an accounting event that affected its financial statements as indicated

below:

Assuming STU uses the perpetual inventory method, which of the following events could have

caused these effects?

a$.$ Purchased inventory on account. Liability

b$.$ Wrote down inventory to recognize a market value that was below cost.

c$.$ Paid transportation$-$in costs.

d$.$ Recognized a sale.