$16.$ LO $6\mathrm{.}4$A customer obtains a purchase allowance from the retailer in the amount of $$220$ for damaged merchandise. Which of the following represents the journal entry for this transaction if the customer has not yet remitted payment?

Debit to Sales Returns and Allowance of $$220$ and credit to Cash of $$220.$

Debit to Sales Returns and Allowances of $$220$ and credit to Accounts Receivable of $$220.$

Debits to Cash and Sales Returns and Allowances of $$200$ and $$20,$ respectively, and credit to Accounts Receivable of $$220.$

$17.$ LO $6\mathrm{.}5$Which of the following is not a characteristic of FOB Destination?

The seller pays for shipping.

The seller owns goods in transit.

The point of transfer is when the goods leave the seller$$s place of business.

The point of transfer is when the goods arrive at the buyer$$s place of business.

$18.$ LO $6\mathrm{.}5$Which two accounts are used to recognize shipping charges for a buyer, assuming the buyer purchases with cash and the terms are FOB Shipping Point?

delivery expense, cash

merchandise inventory, cash

merchandise inventory, accounts payable

The buyer does not record anything for shipping since it is FOB Shipping Point.

$19.$ LO $6\mathrm{.}5$Which of the following is not a characteristic of FOB Shipping Point?

The buyer pays for shipping.

The buyer owns goods in transit.

The point of transfer is when the goods leave the seller$$s place of business.

The point of transfer is when the goods arrive at the buyer$$s place of business.

$20.$ LO $6\mathrm{.}6$A multi$-$step income statement $\_\_\_\_\_\_\_\_.$

separates cost of goods sold from operating expenses

considers interest revenue an operating activity

is another name for a simple income statement

combines cost of goods sold and operating expenses

$21.$ LO $6\mathrm{.}6$Which of the following accounts would be reported under operating expenses on a multi$-$step income statement?

sales

advertising expense

sales returns and allowances

interest expense

$22.$ LO $6\mathrm{.}6$A simple income statement $\_\_\_\_\_\_\_\_.$

combines all revenues into one category

does not combine all expenses into one category

separates cost of goods sold from operating expenses

separates revenues into several categories

$23.$ LO $6\mathrm{.}6$Which of the following accounts would not be reported under revenue on a simple income statement?

interest revenue

net sales

rent revenue

operating expenses

$24.$ LO $6\mathrm{.}7$Which of the following accounts are used when recording a purchase using a periodic inventory system?

cash, purchases

accounts payable, sales

accounts payable, accounts receivable

cash, merchandise inventory

$25.$ LO $6\mathrm{.}7$A retailer obtains a purchase allowance from the manufacturer in the amount of $$600$ for faulty inventory parts. Which of the following represents the journal entry for this transaction, assuming the retailer has already remitted payment?

Accounts Payable debit of $$600$ and Merchandise Inventory credit of $$600.$

Cash debit of $$600$ and Purchase Returns and Allowances credit of $$600.$

Accounts payable debit of $$600$ and credits to Purchase Discounts of $$10$ and to Cash of $$590.$

$26.$ LO $6\mathrm{.}7$A customer returns $$690$ worth of merchandise and receives a full refund. What accounts recognize this sales return, assuming the customer has not yet remitted payment to the retailer?

accounts receivable, sales returns and allowances

accounts receivable, cash

sales returns and allowances, purchases

sales discounts, cost of goods sold

$27.$ LO $6\mathrm{.}7$A customer obtains an allowance from the retailer in the amount of $$450$ for damaged merchandise. Which of the following represents the journal entry for this transaction, assuming the customer has not remitted payment?

Sales Returns and Allowances debit of $$450$ and Cash credit of $$450.$

Sales Returns and Allowances debit of $$450$ and Accounts Receivable credit of $$450.$

Debits to Cash of $$400$ and Sales Returns and Allowances of $$50,$ and Accounts Receivable credit of $$450.$

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