1.Sales returns:

Multiple Choice

• Refer to reductions in the selling price of merchandise sold to customers.

• Are not recorded under the perpetual inventory system until the end of each accounting period.

• Represent cash discounts.

• Refer to merchandise that customers return to the seller after the sale.

• Represent trade discounts.

2. An expense resulting from failing to take advantage of cash discounts when using the net method of recording purchases is called:

Multiple Choice

• Discounts lost.

• Purchases discounts.

• Trade discounts.

• Sales discounts.

• Discounts earned.