1. The term "FOB Destination" means a. The seller pays the shipping cost. b. The seller records an increase in inventory. c. The buyer pays the shipping cost. d. The buyer assumes responsibility at the shipping point. 2. When a seller records a return of goods, the account that is credited is a. Sales Revenue. b. Sales Returns and Allowances. c. Inventory. d. Accounts Receivable. 3. The credit terms, 3/10,n/30, indicate that a: a. 10 percent discount can be deducted if the invoice is paid within three days following the date of sale. b. 3 percent discount can be deducted for a period up to thirty days following the date of sale. c. 3 percent discount can be deducted if the invoice is paid before the tenth day following the date of the sale. d. 3 percent discount can be deducted if the invoice is paid after the tenth day following the sale, but before the thirtieth day. 4. Under the perpetual system, freight costs paid in cash by the buyer for transporting of goods is recorded in which account? a. Freight Expense b. Freight-In c. Inventory d. Freight-Out 5. Tony's Market recorded the following events involving a recent purchase of inventory: Received goods for $80,000, terms 2/10,n/30. Returned $1,600 of the shipment for credit. Paid $400 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's cost of purchase is: a. $76,832. b. $78,800. c. $77,224. d. $77,232. 1. The term "FOB Destination" means a. The seller pays the shipping cost. b. The seller records an increase in inventory. c. The buyer pays the shipping cost. d. The buyer assumes responsibility at the shipping point. 2. When a seller records a return of goods, the account that is credited is a. Sales Revenue. b. Sales Returns and Allowances. c. Inventory. d. Accounts Receivable. 3. The credit terms, 3/10,n/30, indicate that a: a. 10 percent discount can be deducted if the invoice is paid within three days following the date of sale. b. 3 percent discount can be deducted for a period up to thirty days following the date of sale. c. 3 percent discount can be deducted if the invoice is paid before the tenth day following the date of the sale. d. 3 percent discount can be deducted if the invoice is paid after the tenth day following the sale, but before the thirtieth day. 4. Under the perpetual system, freight costs paid in cash by the buyer for transporting of goods is recorded in which account? a. Freight Expense b. Freight-In c. Inventory d. Freight-Out 5. Tony's Market recorded the following events involving a recent purchase of inventory: Received goods for $80,000, terms 2/10,n/30. Returned $1,600 of the shipment for credit. Paid $400 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's cost of purchase is: a. $76,832. b. $78,800. c. $77,224. d. $77,232
