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Problem 1: The account that appears in the chart of accounts for a merchandising entity but not for a service entity is
a. accounts receivable. C. advertising expense.
b. accumulated depreciation. d. sales returns and allowances.
Problem 2: Olive Valenzuela Traders purchased merchandise from San Jose Suppliers for P3,600 list price, subject to a trade discount or 25%. The goods were purchased on terms of 2/10, n/30, F.O.B. destination. Valenzuela paid P100 transportation costs. Valenzuela returned P400 (list price) of the merchandise to San Jose and later paid the amount due within the discount period. The amount paid is
a. P2,254. C. P2,246.
b. P2,252. d. P2,352.
Answer the questions on the following page using the Consolidated Balance Sheet and the Notes to Consolidated Financial Statements section.
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