1) Under a perpetual inventory system, when merchandise for resale to customers is purchased, a debit is made to, Supplies Merchandise Inventory C) Cost of Goods Sold d) Accounts Payable. 2) If a company purchases inventory for $40,000 with terms 2/10 n/30 and pays within the discount period, the amount of cash paid is, $39,200 $36,000 c) $40,000 d) $40,800 3) When using First-In, First-Out (FIFO), a) older costs go to the balance sheet, newer costs go to the income statement. b) identical costs go to the balance sheet and the income statement. ) older costs go to the income statement; newer costs go to the balance sheet. d) management can decide which costs to assign to the balance sheet and which costs to assign to the income statement. 4) If the ending inventory is overstated, assets will be overstated, and owner's equity will be understated. assets will be overstated, and owner's equity will be overstated. assets will be understated, and owner's equity will be overstated. d) assets will be understated, and owner's equity will be understated