1.The merchandise inventoryaccount appears on:

a. the income statement

b. both the income statement and the balance sheet

c. the balance sheet as an investment

d. the balance sheet as a current asset

2.We purchase merchandise on account with the credit terms 2/10, n/30. What does the 2/10 stand for?

a. We could receive a 2% discount if we pay the invoice within 30 days.

b. We could receive a 10% discount if we pay the invoice within 30 days.

c. We could receive a 2% discount if we pay the invoice with 10 days.

d. We must pay the invoice within 30 days in order to receive a 2% discount.

3.On April 1, our company purchases $1,000 worth of merchandise inventory on credit with the terms 2/10, n/30. What is the amount we would credit to cash if we pay this invoice on April 9?

a. $1,000

b. $998

c. $990

d. $980

4.What is the loss of inventory that occurs because of theft, damage, and errors?

a. loss of market value

b. shrinkage

c. inventory loss expense

d. inventory error expense