Quick Check-Ch 4 copy.docx - ACCOUNTING 2301 Quick Check – Chapter 4 True or False 1 One key difference between service providers and retailers is

Quick Check-Ch 4 copy.docx - ACCOUNTING 2301 Quick Check...

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ACCOUNTING 2301 Quick Check – Chapter 4 True or False: 1. One key difference between service providers and retailers is that all retailers carry an inventory of physical products they intend to sell while service providers sell time and expertise. T F 2. The largest single current asset and largest single operating expense of retailers pertain directly to acquiring and selling merchandise. The asset is called Merchandise Inventory, and the expense is called Cost of Goods Sold . T F 3. When transportation costs are involved in the purchase of merchandise, the terms “FOB shipping point” means that the seller of the merchandise bears the cost of transporting the goods to the buyer’s destination. T F 4. Purchase discounts, purchase returns and purchase allowances all increase the cost of merchandise and are accounted for in the Inventory account.
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