MULTIPLE CHOICE. Choose the one alternative that best completes the statement or an uestion. 1) Goods in transit are: A) always included in the transportation company's inventory. B) always included in the buying company's inventory. C) always included in the selling company's inventory D) inventory items being transported from a seller to a buyer. 2) Acme Company's balance sheet shows three inventory accounts-raw materials, work and finished goods. Acme Company must be a: A) service business. C) wholesale distributor. B) manufacturer. D) merchandiser. 3) Assume that a perpetual inventory system is in use. Which of the following statements the journal entries prepared is correct? A) When a customer returns inventory, the seller debits Sales Returns & Allowances perpetual inventory system. B) When a company grants an allowance to a customer, Inventory is credited when u perpetual inventory system. C) When a company receives payment from a customer for a sale, Cash is debited a Payable is credited. D) "Freight-out" or delivery costs associated with sales should be included in Cost Sold. 4) Which of the following items will require an adjusting journal entry on a company's A) Deposits in transit C) NSF check B) Error made by the bank D) Outstanding checks 5) The Allowance for Doubtful Accounts account is a contra-account that offsets B) Bad Debt Expense. D) Accounts Receivable. A) Cash. C) Net Income