3. SHORT ANSWERS (9 Marks) When the buyer pays the freight costs, which account would be debited in the entry to record the payment under a perpetual inventory system? (1 mark! " the normal operating cycle of a merchandising company longer or shorter than for a service company? Briefly explain the main difference between their operating cycles (2 marks 3) Goods that were purchased FOB destination are still in transit when a physical inventory is being done. Will the seller include these goods in their physical inventory count? Explain (2 mark) 4) Give a brief explanation of what an EFT is, and why a company may prefer EFT payments. (3 marks) 5) What is the purpose of recording estimated uncollectible accounts using the allowance method? (1 mark) 13) A company o ks we the bank Acompany maintains the aset CCOULCashBank reciprocal account that is a) a contra-asset account. b) a liability account c) also an asset account. d) an owner's equity account. 14) Bank errors a) occur because of time lags. b) must be corrected by debits. c) must be corrected by the bank. d) are corrected by making an adjusting entry on the depositor's books. 14) The collection period ratio is a measure of the company's a) liquidity b) solvency. c) efficiency. d) profitability. 15) Which of the following does not belong on a single-step income statement? a) net sales b) salaries expense c) gross profit d) rent revenue TIUU- Accounting 1 3) A customer uses their better Life Gym credit card to change trea $1,000 and the interest charges t er Life Gymhen per annut the to pay the bill within 30 days and interes not paid in a day. The customer interest is added to the customer's account what is the amount of the 30 b) S15 c) S 10 d) S6 6) in a perpetual inventory system using the earnings approach cost oloods sold is recorded a) on a daily basis. b) at the end of the accounting period c) on an annual basis d) with each sale. 7) A company purchased Inventory as follows: 200 units at $ 9 300 units at $ 10 The weighted average unit cost for inventory is a) S 9.00. b) $ 9.50 c) $ 9.60 d) $ 10.00. 8) Water Inc, maintains a petty cash fund with a balance of $100. A disbursement of $10 from the fund for postage is recorded as an expense in the accounting records a) at the time the cash is taken from the fund. b) when the postage is used. c) when the petty cash fund is replenished. d) when the adjusting entries are prepared at year end. a) an additional cos OST/MST paid on the purchase of inventory is itional cost that must be absorbed by the merchandise company b) not included in inventory because it is recoverable O recorded as an operating expense on the income statement Bed as additional freight costs and included in the calculation of the cost of goods sold Me receivable that is usually evidenced by a formal instrument of crean a) trade receivable, b) note receivable. c) accounts receivable. d) note payable. 11) I ending inventory is overstated in 2021. and no further errors are made in 2022, then pronit wm be a) overstated in 2021 and understated in 2022. b) understated in 2021 and overstated in 2022. c) overstated in both 2021 and 2022. d) overstated in 2021 and correct in 2022. 12) Revaluation of inventories to net realizable value should occur a) only if the amount is material. b) at year end only c) in the period during which the decline occurs. d) at management's discretion