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Robert No 1. Two categories of expenses for merchandising companies are cost of goods sold and financing expenses b. operating expenses and financing expenses. c. cost of goods sold and operating expenses. d sales and cost of goods sold. 2. Under the direct write-off method of accounting for uncollectible accounts, Bad Debt Expense is debited a. when a credit sale is past due b. at the end of each accounting period. c. whenever a pre-determined amount of credit sales have been made. d. when an account is determined to be uncollectible. 3.Costner's Market recorded the following events involving a recent purchase of merchandise: Received goods for $40,000, terms 2/10, 1/30. Returned $800 of the shipment for credit. Paid $200 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory increased by $38,416. b. increased by $38,612. c. increased by $38.616. d. increased by $39,400. 4. The entry to record the receipt of payment within the discount period on a sale of $2,500 with terms of 2/10, 1 include a credit to dallo a Sales Discounts for $50. b. Cash for $2.450. c. Accounts Receivable for $2,500. d. Sales Revenue for $2,500. 5.During July, the following purchases and sales were made by Phast Company. There was no beginning invel Company uses a perpetual inventory system. Purchases Sales July 3 40 units @ $14 July 13 50 units 11 40 units @ $15 22 20 units 20 20 units @ $16 Under the LIFO method, the cost of goods sold for each sale is: July 13 July 22 a. $700 $280 b. 740 320 750 300

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