1. In many retail businesses, inventory is the largest current asset. A. True B. False 2. Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as credit sales. A. True B. False 3. Purchased merchandise on account for $3,500. Write the Journal Entry. A. Debit Merchandise Inventory 3,500; Credit Accounts Payable 3,500 B. Debit Merchandise Inventory 3,500; Credit Cash 3,500 C. Debit Merchandise 3,500; Credit Trades Payable 3,500 D. Debit Accounts Payable 3,500; Credit Sales 3,500 4. Requested an allowance of $200 on the merchandise purchased in question 3. This allowance is granted. Write the journal entry. A. Debit Merchandise Inventory 200; Credit Accounts Payable 200 B. Debit Accounts Payable 200; Credit Inventory 200 C. Debit Customer Refunds Payable 200; Credit Merchandise Inventory 200 D. Debit Accounts Receivable 200; Credit Sales 200 5. Sale of merchandise was made for $700. Cost of merchandise sold was $300. Write the Journal Entry. A. Debit COGS 300; Credit Merchandise Inventory 300; Debit Account Receivable 300; Credit Sales 300 B. Debit Merchandise Inventory 300; COGS 300; Debit Sales 700; Credit Account Receivable 700 C. Debit Account Receivable 700; Credit Sales 700; Debit COGS 300; Credit Inventory 300 D. Cannot do this journal entry because it does not balance 6. Which of the following accounts has a normal debit balance? A. Purchase discounts B. Sales Tax Payable C. Allowance for Doubtful Accounts D. Delivery expense 7. Paid sales tax of $3,000 to the taxing authority would require a debit to A. Sales tax payable B. Cash C. Sales discount D. Sales 8. If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as A. FOB shipping point B. FOB destination C. FOB n/30 D. FOB buyer 9. Cost of Goods Sold is closed to Income Summary at the end of the period. A. True B. False 10. Which of the following accounts will only be found in the chart of accounts of a merchandising company? A. Sales B. Accounts Receivable C. Merchandise Inventory D. Accounts Payable