Reference no: EM132740088

Problem 1: Under the perpetual inventory system accounting standards require any discount received for paying for inventory purchased within the discount period to be

a. Credited to the Bank account.

b. Credited to the Inventory account.

c. Credited to the Cost of Sales account.

d. Credited to the Accounts payable account.

Problem 2: Which statement is correct? When goods are returned and require a cash refund

a. the Cash account will be debited.

b. the Cash account will be credited.

c. the Sales Returns and Allowances account will be credited.

d. the Accounts Receivable account will be credited.

Problem 3: In a perpetual inventory system the Cost of Sales account is used

a. only when a cash sale of inventory occurs.

b. only when a credit sale of inventory occurs.

c. only for cash and credit sales of inventory

d. whenever there is a sale of inventory or a return of inventory sold.