Acct 2001 Exam 1: Practice Questions Page 1 of 7 Chapter 5 1. Under the perpetual system when goods previously sold on account are returned to the seller, the seller should: a. Debit accounts receivable b. Debit accounts payable c. Debit sales returns and allowance d. Credit inventory
2. Gross Profit is:
3. On June 2, ABC Company sold merchandise to XYZ Company for $2,000 with terms 2/15, n/30. XYZ Company returns damaged goods of $600. On June 16 ABC receives a check from XYZ to settle the account. What is the amount of the check?
4. Which of the following is notcorrect regarding the perpetual inventory system?
5. Sales returns and allowances and sales discounts are: a. Sales accounts b. Liability accounts c. Expense accounts d. Contra revenue accounts
6. Under the perpetual inventory system, purchases of merchandise for sale are recorded in an account called:
7. Which of the following would not be considered an operating expense?