Operating income is gross profit

a.plus cost of goods sold.

b.less operating expenses.

c.less inventory.

d.less cost of goods sold.

Inventory is reported as a(n)

a.expense.

b.current liability.

c.current asset.

d.long-term asset.

Which of the following does not relate to either of the two adjusting entries for customer refunds, allowances, and returns?

a.One entry creates an estimated returns inventory account.

b.One entry creates a customer refund liability account.

c.One entry reduces the sales account.

d.One entry records the sales of goods to customers.