6. The journal entry to record a cash sale for a merchandising business is

a. Cash

Sales

b. Cash

Fees earned

c. Accounts Receivable

Sales Returns and Allowances

d. Accounts Receivable

Sales Revenue

7. On January 15, Nifty Company sells merchandise on account to Martinez Associates for $20,000 with terms 2/10, n/30. On January 20, Martinez returns merchandise worth $4,000 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

a. $15,600

b. $15,680

c. $16,000

d. None of the above

8. Which of the following companies would be most likely to use a perpetual inventory system?

a. Grain company

b. Beauty salon

c. Car dealership

d. Yogurt franchise

9. Adams Company is a retailer and uses a perpetual inventory system. Which statement is correct?

a. Returns of merchandise by Adams Company to a manufacturer are credited to Inventory.

b. Freight paid to get merchandise to Adams Companys store is debited to Freight Expense.

c. A return of merchandise by one of Adams Companys customers is credited to Inventory.

d. Discounts taken by Adams Companys customers are credited to Inventory

10. Under the perpetual system, cash freight costs incurred by the buyer for the transporting of goods is recorded in which account?

a. Freight Expense

b. Freight-In

c. Merchandise Inventory

d. Freight-Out