1. Gross Profit equals the difference between? a. Net income and operating expense. b. Sales revenue and cost of goods sold. c. Sales revenue and operating expenses. d. Sales revenue and cost of golds sold plus operating expenses. 2. Two categories of expenses on the Income Statement of a merchandising company are? a Cost of goods sold and financing expenses. b. Operating expenses and financing expenses. c. Cost of goods sold and operating expenses. d. Other expenses and cost of goods sold. 3. Generally, the Revenue account for a merchandising enterprise is called a a. Sales Revenue or Sales b. Investment Income c. Gross Profit d. Net Sales 4. When a merchandising business sells inventory, it must record? a a. An increase in revenue b. An increase in cost of goods sole c. A reduction in inventory d. All of the above, 5. The seller's journal entry to record a return of merchandise sold on account under a perpetual inventory system would credit? a Accounts Payable b. Estimated Returns Inventory c. Sales Revenue