5. When the cost of goods sold will be more than the cost of purchases. a. there is no beginning merchandise inventory (first year of business) b. there is no ending merchandise inventory c. purchases are equal to net sales d. the beginning inventory values are greater than the ending inventory values 6. A perpetual inventory system a. eliminates the need for a year-end physical count. b. requires that a physical count be taken to determine the cost of goods sold. c. uses inventory records that are adjusted each time inventory is purchased or sold. d. uses a purchases account to record the purchase of inventory. 7. Net income plus operating expenses is equal to a. cost of merchandise sold b. cost of merchandise available for sale c. net sales d. gross profit 8. Which account is not classified as a selling expense? a. Sales Salaries b. Sales Commissions c. Sales Discounts d. Advertising Expense 9. Which of the following is NOT an administrative expense