Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a
| a. | debit to Cash | |
| b. | credit to Merchandise Inventory | |
| c. | debit to Merchandise Inventory | |
| d. | credit to Customer Refunds Payable |
Answer = c
When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the
| a. | account form | |
| b. | horizontal form | |
| c. | report form | |
| d. | comparative form |
Answer = c
A chart of accounts for a merchandising business
| a. | usually is the same as the chart of accounts for a service business | |
| b. | usually is standardized by the FASB for all merchandising businesses | |
| c. | always uses a three-digit numbering system | |
| d. | usually requires more accounts than does the chart of accounts for a service business |
Answer = d
Under the perpetual inventory system, all purchases of merchandise are debited to the account
| a. | Cost of Merchandise Available for Sale | |
| b. | Cost of Merchandise Sold | |
| c. | Purchases | |
| d. | Merchandise Inventory |
Answer = d
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