Question 20 2.5 pts

Merchandise Inventory is what type of account?

Liability

Expense

Asset

Contra-Asset

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Question 21 2.5 pts

Returned merchandise for credit on account. The perpetual inventory system is in use. This will be recorded with:

a debit to an asset and a credit to a liability.

a debit to an asset and a credit to an expense.

a debit to a liability and a credit to an expense.

a debit to a liability and a credit to an asset.

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Question 22 2.5 pts

Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This will be recorded with:

a debit to a liability and a credit to purchases.

a debit to an expense and a credit to a liability.

a debit to an expense and a credit to an asset.

a debit to an asset and a credit to an asset.

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Question 23 2.5 pts

If merchandise was bought for Cash, the same entry would be made on the company's books regardless of the type of inventory method is used.

True

False