Reference no: EM132650505

Question 1: A debit memo represents a decrease to accounts payable and therefore results in less money owed to the seller.

Select one:

• True
• False

Question 2: The service fee charged by a bank is a reduction to the bank account balance and therefore should be listed as a debit entry on the bank statement.

Select one:

• True
• False

Question 3: When seller pays for shipping, the cost of freight is added to the cost of inventory by debiting Merchandise Inventory.

Select one:

• True
• False

Question 4: In a merchandising business, when merchandise is sold on account, the only journal entry required is a Debit to Accounts Receivable and a Credit to Sales.

Select one:

• True
• False

Question 5: A chart of accounts for a merchandising business

Select one:

a. usually is the same as the chart of accounts for a service business
b. usually requires more accounts than does the chart of accounts for a service business
c. usually is standardized by the FASB for all merchandising businesses
d. always uses a three-digit numbering system