An example of a service-based company is:

1. Amazon.com
2. Best Buy
3. An accounting firm
4. Home Depot

A merchandising company uses which account to record the cost for merchandise purchased for resale?

1. Sales
2. Inventory expense
3. Cost of goods sold
4. Service Fees

Which inventory system provides current inventory cost and quantity on hand?

1. Perpetual system
2. Periodic system
3. Neither system provides values for inventory on hand
4. Both systems provide values for inventory on hand

Purchase discounts:

1. Increase the amount of cash due
2. Decrease the amount of cash due
3. Are not allowed under the perpetual inventory system
4. Are not allowed by GAAP

Under a perpetual inventory system, cost of goods sold is recorded:

1. At the end of the period
2. At the time the item is sold
3. At the time the inventory is purchased
4. Is not recorded

When freight costs are incurred by the buyer (FOB shipping point), the costs are:

1. Credited to Inventory
2. Debited to Accounts Receivable
3. Debited to Inventory
4. Debited to Freight Expense

JT Enterprises sells $5,000 of merchandise to TJ Company. JT Enterprises uses the perpetual inventory system. The merchandise cost JT Enterprises $2,600. What is the journal entry?

1. Accounts Receivable 5000, Sales Revenue 5000
2. Accounts Receivable 2600, Sales Revenue 2600
3. Accounts Receivable 5000, Sales Revenue 5000, Cost of Goods Sold 2600, Inventory 2600
4. Accounts Receivable 5000, Sales Revenue 5000, Inventory 2600, Cost of Goods Sold 2600

Forest Company returns $500 of merchandise to Camp Company. The merchandise cost Camp Company $300. What is the journal entry to record this transaction?

1. Sales Returns and Allowances 500, Accounts Receivable 500, Cost of Goods Sold 300, Inventory 300
2. Sales Returns and Allowances 500, Accounts Receivable 500, Inventory 300, Cost of Goods Sold 300
3. Sales Revenues 500, Accounts Receivable 500, Inventory 300, Cost of Goods Sold 300
4. Sales Revenues 500, Sales Returns and Allowances 500, Inventory 300, Cost of Goods Sold 300

Given the following information, what were the net sales for the period?

Sales Revenue24,000

Sales Returns and Allowances1,200

Sales Discounts800

1. $24,000
2. $26,000
3. $22,000
4. $25,200

Companies may sell their accounts receivable:

1. To quickly obtain cash
2. To avoid time and expense of collecting
3. Both of the above
4. Companies cannot sell their accounts receivable to other parties