14. The entry to record the return of goods from a customer would include aa. debit to Sales.b. credit to Sales.debit to Sales Returns and Allowances.C.d. credit to Sales Returns and Allowances.15. A physical count of inventory is usually takena. in the middle of the fiscal year.b. at the end of the fiscal year.at the start of the fiscal year.d. at the peak of the busy season.с.16. Which of the following activities is not a component of the operating cycle?a. sale of merchandiseb. ordering of merchandisec. purchase of merchandised. collection of cash from merchandise sales17. Under the perpetual inventory system, the entry to record a purchase return wouldinclude a credit toa. Accounts Payable.b. Cost of Goods Sold.C. Merchandise Inventory.d. Purchases Returns and Allowances.18. Which of the following is not considered an Operating Expense?a. Transportation Outb. Cost of Goods Soldc. Advertising Expensed. Administrative Expenses19. The Purchases Discount account is a contra account toa.Sales.b. Purchases.. Sales Discount.d. Accounts Payable.20. The periodic inventory system is used most commonly by companies that sella. high-priced, low-volume merchandise.b. high-priced, high-volume merchandise.c. low-priced, high-volume merchandise.d. low-priced, low-volume merchandise. Multiple Choice1. Under the perpetual inventory system, in addition to making the entry to record asales return, a company woulda. make no additional entry until the end of the period.b. debit Cost of Goods Sold and credit Purchases.c. debit Cost of Goods Sold and credit Merchandise Inventory.d. debit Merchandise Inventory and credit Cost of Goods Sold.2. When the seller advances the transportation costs and the terms of sale are FOBshipping point, the seller records the payment of the transportation costs bydebitinga. Accounts Receivable.b. Transportation In.c. Accounts Payable.d. Sales.3. Under the perpetual inventory system, which of the following accounts would notbe used?a.Cost of Goods Soldb. Merchandise InventoryC.Salesd. Purchases4. Which of the following is not considered in computing net cost of purchases?a. Purchasesb. Purchases Returns and Allowancesc. Transportation paid on purchased goodsd. Transportation paid on goods shipped to customers5. The account that appears in the chart of accounts for a merchandising entity but notfor a service entity isa. Sales Returns and Allowances.b. Accumulated Depreciation.c.Accounts Receivable.d. Advertising Expense.6. Merchandise Inventory becomes part of Cost of Goods Sold when a companysells the inventory.b. pays for the inventory.c. purchases the inventory.d. receives payment from the customer.a.1. The excess of Net Sales over the Cost of Goods Sold is calleda. Profit.b. Gross Profit.c. Operating Profit.d. Merchandising Profit.& Under the perpetual inventory system, in addition to making the entry to record asale, a company wouldmake no additional entry until the end of the period.b. debit Merchandise Inventory and credit Cost of Goods Sold.debit Cost of Goods Sold and credit Purchases.a.C.d. debit Cost of Goods Sold and credit Merchandise Inventory.9. When a seller of merchandise allowed a customer a reduction from the originalprice for defective goods, the seller will issue to the customer aa. sales invoice.b. official receipt.c. debit memorandum.d. credit memorandum.10. Each of the following companies is a merchandising company except aa. wholesale parts company.b. furniture store.c. candy store.d. car wash.11. Which of the following terms does not mean the same as the others?a. Bottom Lineb. Operating ProfitGross Profitd. Profit from OperationsC.12. Which of the following goods would not be included in Merchandise Inventory for apurchasing company?a. goods ordered and received from the supplierb. goods on hand in the showroomC. goods in transit shipped FOB shipping pointd. goods in transit shipped FOB destination13.A sale on March 21 with terms of n/10 eom is due to be collected bya. April 30.b. April 10.C. April 1.d. March 31.

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