1. A merchandiser's statement of retained earnings looks exactly like that of a service business. Select one: True False

2. Which of the following line items will appear on the income statement of a merchandiser but not of a service company? Select one: A. Depreciation Expense B. Supplies Inventory C. Salaries Expense D. Cost of Goods Sold

3. Net sales revenue is equal to sales revenue less cost of goods sold. Select one: True False

4. VB Specialty Foods, a grocery merchandiser, purchased goods and paid transportation to bring them to the company warehouse. The transportation cost is known as ________. Select one: A. freight out B. selling expense C. cost of goods sold D. freight in

5. FOB destination refers to a situation where title to goods while in transit vests with the ________. Select one: A. insurance agency B. buyer C. seller D. transport agency

6. Under which of the following terms will the buyer be required to pay transportation costs? Select one: A. CIF B. FOB destination C. 5/5, net 45 D. FOB shipping point

7. Under the terms FOB destination, title to the merchandise will pass to the purchaser when the goods are received by the purchaser Select one: True False

8. A company decides to ignore a very small error in their inventory balance. This is an example of application of the ________. Select one: A. consistency principle B. materiality concept C. disclosure principle D. accounting conservatism

9. The perpetual inventory system keeps a running record of inventory and cost of goods sold. Select one: True False

10. The entry to close Cost of Goods Sold includes a debit to Income Summary. Select one: True False