Deck 5: Merchandising Operations

Question 1

Credit terms of 2/10,n/30 indicate that a 2% discount may be taken if the invoice is paid within 10 days,but the total invoice amount is due if paid on the 11^th through the 30^th day after the invoice date.

Answer 1

True

Question 2

In a perpetual inventory system,the entry to record the inventory purchased includes a credit to Cost of goods sold.

Answer 2

False

Question 3

When a company is purchasing inventory,and pays early to take advantage of the purchase discount offered by the vendor,that amount is debited to the Inventory account.

Answer 3

False

Question 4

A company receives an invoice that indicates that title to the merchandise will pass to the company when they receive the goods.This situation is described as FOB destination.

Question 5

Merchandising consists of:

A) manufacturing products.
B) providing a service.
C) buying and selling products.
D) purchasing raw materials.

Question 6

The perpetual inventory system keeps a running record of inventory and cost of goods sold.

Question 7

The periodic inventory system keeps a running record of inventory and cost of goods sold.

Question 8

When a company uses the perpetual inventory method,the inventory account should stay current at all times.

Question 9

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2 percent if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

Question 10

The periodic inventory system is normally used for relatively inexpensive goods.

Question 11

Which of the following assets MUST a merchandising company have for daily operations?

A) Accounts receivable
B) Prepaid insurance
C) Merchandise inventory
D) Equipment

Question 12

What is the first step in the accounting cycle for a merchandising company?

A) The company sells inventory to customers, creating accounts receivable.
B) The company collects cash.
C) The company buys inventory.
D) The company delivers inventory to customers.

Question 13

Which of the following assets does a merchandising company-but NOT a service company-need?

A) Accounts receivable
B) Prepaid insurance
C) Merchandise inventory
D) Equipment

Question 14

Inventory is the:

A) items purchased to run the daily operations of a business.
B) items held by a company to be sold to customers.
C) expenses of a company that were incurred.
D) equipment that was purchased.

Question 15

Purchase returns and allowances decrease the net amount of cash that will be paid for the inventory,and so they should reduce the cost of the inventory as recorded in the Inventory account.

Question 16

In a periodic system,inventory balances and the cost of goods sold for the current period are determined:

A) at the time of sale.
B) on a frequent basis.
C) on the first day of each year.
D) when a physical inventory count is taken.

Question 17

Freight in should be added to the inventory account if the company uses the perpetual inventory method.

Question 18

Under a perpetual inventory system,which of the following would NOT be required?

A) Record cost of goods sold with each sale
B) Updating the inventory balance with each sale
C) Detailed inventory records
D) A weekly count of the inventory

Question 19

The accounting cycle for a merchandising company begins with the purchase of inventory.

Question 20

When a company is purchasing inventory,and there are either returns or allowances for damaged goods,those amounts are recorded as a debit to the Sales returns and allowances account.

Question 21

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Which of the following entries would be made to record the payment if it is made within 10 days?

A) $1,000 debit to Accounts payable and a $1,000 credit to Cash
B) $1,000 debit to Accounts payable, a $20 credit to Inventory and a $980 credit to Cash
C) $20 debit to Inventory, a $1,000 debit to Accounts payable and a $1,020 credit to Cash
D) $980 debit to Accounts payable, a $20 debit to Inventory and a $1,000 credit to Cash

Question 22

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Defective inventory of $200 is returned 2 days later and the accounts are appropriately adjusted.If the company paid the vendor within 10 days,which of the following entries would be made to record the payment?

A) $800 debit to Accounts payable and an $800 credit to Cash
B) $784 debit to Accounts payable, a $16 debit to Inventory and an $800 credit to Cash
C) $16 debit to Inventory, an $800 debit to Accounts payable and an $816 credit to Cash
D) $800 debit to Accounts payable, a $16 credit to Inventory and a $784 credit to Cash

Question 23

FOB shipping point means that the:

A) seller normally pays the transportation costs.
B) buyer normally pays the transportation costs.
C) buyer and the seller split the shipping costs.
D) shipping costs are billed to the seller.

Question 24

FOB Destination means that the:

A) seller normally pays the transportation costs.
B) buyer normally pays the transportation costs.
C) buyer and the seller split the shipping costs.
D) shipping costs are billed to the buyer.

Question 25

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Which of the following entries would be made to record the payment if it is made 20 days later?

A) $1,000 debit to Accounts payable and a $1,000 credit to Cash
B) $1,000 debit to Accounts payable, a $20 credit to Inventory and a $980 credit to Cash
C) $20 debit to Inventory, a $1,000 debit to Accounts payable and a $1,020 credit to Cash
D) $980 debit to Accounts payable, a $20 debit to Inventory and a $1,000 credit to Cash

Question 26

If a company,using a perpetual inventory system,purchases inventory on account,and later returns $200 of goods to the vendor,what entry would be made to record the return of goods to the vendor?

A) $200 debit to Purchases and a $200 credit to Accounts payable
B) $200 debit to Accounts payable and a $200 credit to Inventory
C) $200 debit to Inventory and a $200 credit to Accounts payable
D) $200 debit to Accounts payable and a $200 credit to Purchases

Question 27

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.

-Which of the following entries would be made to record payment to the vendor if the payment is made within 10 days?

A) $1,960 debit to Accounts payable and a $1,960 credit to Cash
B) $2,000 debit to Accounts payable, a $100 debit to Inventory and a $1,960 credit to Cash
C) $2,000 debit to Accounts payable, a $40 credit to Inventory and a $1,960 credit to Cash
D) $1,960 debit to Accounts payable, a $40 debit to Inventory and a $2,000 credit to Cash

Question 28

Freight out is an addition to the Inventory account if the company uses the perpetual inventory method.

Question 29

What is a purchase return?

A) A return of merchandise that is defective or damaged
B) A customer refund from the sale of inventory
C) A price reduction
D) A return of cash to the purchaser

Question 30

A purchase return of goods purchased on credit is recorded by the purchasing company as a debit to what account?

A) Accounts receivable
B) Inventory
C) Cost of goods sold
D) Accounts payable

Question 31

Which of the following is TRUE about freight in?

A) Freight in is added to the cost of merchandise inventory.
B) Freight in is a selling expense.
C) Freight in is an operating expense.
D) Freight in is deducted from Accounts payable.

Question 32

What is freight in?

A) Transportation costs to ship goods into the warehouse
B) Transportation costs that are not recorded
C) Costs that are expensed
D) Transportation costs to ship goods out of the warehouse

Question 33

An invoice in the amount of $600.00 for merchandise purchased is shown with a 4/10,n/30 discount.To get the discount,the amount to pay on or before the tenth day is:

A) $552.50.
B) $540.25.
C) $576.00.
D) $600.00.

Question 34

In the credit terms of 2/10,n/30,what does the 2/10 mean?

A) The invoice must be paid in 2 days or a 10% late charge will be assessed.
B) The invoice was printed 2 days after the sale and is due in 10 days.
C) The goods shipped took 2 days to arrive and the charge was $10.00.
D) The purchaser may take a 2% discount if the invoice is paid in 10 days.

Question 35

A company uses the perpetual inventory method.Which of the following entries would be made to record a purchase of inventory on account?

A) The accounting entry would be a debit to Purchases and a credit to Accounts payable.
B) The accounting entry would be a debit to Accounts payable and a credit to Purchases.
C) The accounting entry would be a debit to Inventory and a credit to Accounts payable.
D) The accounting entry would be a debit to Accounts payable and a credit to Inventory.

Question 36

Which of the following means that the shipment is free on board at the point of shipment and the buyer pays all shipping costs?

A) FOB destination
B) FOB shipping point
C) COD
D) 4/10, eom

Question 37

The terms on an invoice are 3/10,n/25.This means that a:

A) discount of 10% is allowed if the invoice is paid in 3 days.
B) discount of 3% is allowed if the invoice is paid in 10 days.
C) discount of 25% is allowed if the invoice is paid in 10 days.
D) discount of 3% is allowed if the invoice is paid after 25 days.

Question 38

An invoice is dated April 28 for $235.00 and is shown with payment terms of 5/10,n/30.If the invoice is paid on May 12,the amount to pay will be:

A) $235.00.
B) $211.50.
C) $223.25.
D) $230.00.

Question 39

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Defective inventory of $200 is returned 2 days later and the accounts are appropriately adjusted.If the company paid the vendor 25 days later,which of the following entries would be made to record the payment?

A) $800 debit to Accounts payable and an $800 credit to Cash
B) $784 debit to Accounts payable, a $16 debit to Inventory and an $800 credit to Cash
C) $16 debit to Inventory, an $800 debit to Accounts payable and an $816 credit to Cash
D) $800 debit to Accounts payable, a $16 credit to Inventory and a $784 credit to Cash

Question 40

What is freight out?

A) Transportation costs to ship goods into the warehouse
B) Inventory costs
C) Costs that are not expensed
D) Transportation costs to ship goods out of the warehouse

Question 41

A sales return is recorded with a credit to Accounts receivable.

Question 42

Journalize the following transactions (using the perpetual inventory method).Purchased merchandise on account for $4,300.

Question 43

A company uses the perpetual inventory method.To record a sale of merchandise on account will require an entry to record revenue and an entry to record cost of goods sold.

Question 44

Using the perpetual inventory system,discounts taken on an invoice,such as 3/10,n/30,would be:

A) debited to Inventory.
B) credited to Inventory.
C) debited to Cost of goods sold.
D) credited to Cost of goods sold.

Question 45

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.

-
Please provide the journal entry on Aug.9.

Question 46

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.

-
Please provide the journal entry on Aug.15.

Question 47

Journalize the following transactions (using the perpetual inventory method).Paid $230 cash for freight in on merchandise purchased.

Question 48

Oscar's Packaging shipped goods to a customer and paid the freight out of $400 in cash.Please provide the journal entry for the payment of freight out.

Question 49

A company purchased inventory for $2,200 on account,and recorded the following journal entry:
The vendor's invoice showed terms of 3/10,net 30.Please provide the journal entry for the payment of the invoice on the 7th day (using the perpetual inventory method).

Question 50

Compute the amount of payment for an invoice of $5,600,4/10,n/30 paid on the 7th day.

A) $5,600
B) $5,040
C) $5,376
D) $5,570

Question 51

A company purchased inventory for $2,200 on account,and recorded the following journal entry:
The vendor's invoice showed terms of 3/10,n/30.Please provide the journal entry for the payment of the invoice on the 17th day (using the perpetual inventory method).

Question 52

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.

-
Please provide the journal entry on Aug.5.

Question 53

A sales allowance is recorded with a debit to Inventory.

Question 54

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.

-The company then returned $200 of damaged goods and got an allowance from the vendor.The company paid the vendor 8 days after the sale.Assuming this was the only transaction affecting inventory,and that there was no beginning balance,what would the cost basis of the inventory be?

A) $1,764
B) $1,864
C) $2,100
D) $1,900

Question 55

When a company ships goods to a customer and pays for freight out,how is that cost recorded?

A) As an operating expense
B) As an addition to the cost of inventory
C) As a reduction of sales revenue
D) As an addition to cost of goods sold

Question 56

A sales allowance is recorded with a credit to Accounts receivable.

Question 57

Reid Art Supply Company uses a perpetual inventory system.The company had the following transactions during August,2012:
Aug.5 Reid Company purchased $2,900 of merchandise on account.Freight and credit terms were FOB shipping point,3/15,n/60.
Aug.9 Reid Company paid transportation costs of $440 for the Aug.5 purchase.
Aug.10 Reid Company returned $600 of defective merchandise that had been purchased on Aug.5.
Aug.15 Reid Company paid for the merchandise purchased on Aug.5.

-
Please provide the journal entry on Aug.10.

Question 58

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.

-The company paid the vendor 9 days after the sale.Assuming this was the only transaction affecting inventory,and that there was no beginning balance,what would the cost basis of the inventory be?

A) $1,960
B) $2,000
C) $2,060
D) $2,100

Question 59

A company has purchased inventory and receives an invoice that indicates that the buyer must pay the transportation costs of delivering the merchandise.Which of the following will most likely be noted as the delivery terms?

A) FOB destination
B) FOB shipping point
C) FOB 2/10, n/30
D) None of the above

Question 60

A sales return is recorded with a credit to Inventory.

Question 61

Net sales revenue is equal to Sales revenue less Cost of goods sold.

Question 62

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received within 10 days?

A) The accounting entry would be an $800 debit to Cash and an $800 credit to Accounts receivable.
B) The accounting entry would be a $784 debit to Cash, a $16 debit to Sales discounts and an $800 credit to Accounts receivable.
C) The accounting entry would be a $16 debit to Sales discounts, an $800 debit to Cash and an $816 credit to Accounts receivable.
D) The accounting entry would be an $800 debit to Cash, a $16 credit to Sales discounts and a $784 credit to Accounts receivable.

Question 63

Which of the following describes Net sales revenue?

A) Sales less Cost of goods sold
B) Sales less Sales discounts
C) Sales less Sales returns and allowances
D) Sales less Sales discounts less Sales returns and allowances

Question 64

What is the difference between a sales return and a sales allowance?

A) A sales return reduces the amount receivable from the customer, but an allowance does not.
B) A sales return involves an adjustment to Inventory, but a sales allowance does not.
C) A sales return requires a debit to Sales returns and allowances, but a sales allowance does not.
D) A sales allowance is deducted from Sales revenue to calculate net sales, but a sales return is not.

Question 65

A company sells merchandise for $1,000 on account with terms of 2/10,n/30.Defective merchandise of $200 is returned 2 days later.Which of the following entries would be made to record the cash receipt for the sale if the payment is received 20 days later?

A) The accounting entry would be an $800 debit to Cash and an $800 credit to Accounts receivable.
B) The accounting entry would be a $784 debit to Cash, a $16 debit to Sales discounts and an $800 credit to Accounts receivable.
C) The accounting entry would be a $16 debit to Sales discounts, an $800 debit to Cash and an $816 credit to Accounts receivable.
D) The accounting entry would be an $800 debit to Cash, a $16 credit to Sales discounts and a $784 credit to Accounts receivable.

Question 66

Referring to the following table,what is Gross profit? $$\begin{array} { | r | r | } \hline \text { Sales revenue } & \$ 460,000 \\\hline \text { Cost of goods sold } & 300,000 \\\hline \text { Operating expenses } & 85,000 \\\hline \text { Sales discounts } & 20,000 \\\hline \text { Sales returns and allowances } & 15,000 \\\hline \text { Interest revenue } & 5,000 \\\hline\end{array}$$

A) $90,000
B) $125,000
C) $140,000
D) $160,000

Question 67

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.

-Which of the following entries correctly records the sales allowance on Michelin's books?

A) $$\begin{array} { | l | r | r | } \hline \text { Sales returns and allowances } & 1,000 & \\\hline \text { Accounts receivable } & & 1,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Sales returns and allowances } & 1,000 & \\\hline \text { Sales revenue } & & 1,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Cost of goods sold } & 1,000 & \\\hline \text { Sales returns and allowances } & & 1,000 \\\hline\end{array}$$
D) $$\begin{array} { | c | r | r | } \hline \text { Sales returns and allowances } & 1,000 & \\\hline \text { Cash } & & 1,000 \\\hline\end{array}$$

Question 68

Which of the following are the normal balances of Sales,Sales discounts,and Sales returns and allowances,respectively?

A) Debit, credit, and credit
B) Debit, debit, and credit
C) Credit, debit, and debit
D) Credit, credit, and debit

Question 69

A company sold merchandise for $350 that cost $221.The entry to record the cost of the merchandise sold would be a:

A) debit to Sales and a credit to Cash for $350.
B) debit to Cash and a credit to Sales for $350.
C) debit to Cost of goods sold and a credit to Inventory for $221.
D) debit to Inventory for $221 and a credit to Cost of goods sold for $221.

Question 70

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.

-On April 10,Michelin received payment from the customer.Which of the following entries correctly records the cash receipt on Michelin's books?

A) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,760 & \\\hline \text { Sales discount } & 240 & \\\hline \text { Accounts receivable } & & 8,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Accounts receivable } & 8,000 & \\\hline \text { Sales discount } & & 240 \\\hline \text { Cash } & & 7,760 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 8,000 & \\\hline \text { Accounts receivable } & & 8,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 7,760 & \\\hline \text { Accounts receivable } & & 7,760 \\\hline\end{array}$$

Question 71

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.

-Which of the following journal entries correctly records the Sales revenue?

A) $$\begin{array} { | l | r | r | } \hline \text { Sales revenue } & 9,000 & \\\hline \text { Accounts receivable } & & 9,000 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Sales revenue } & 9,000 & \\\hline \text { Cost of goods sold } & & 9,000 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Cash } & 9,000 & \\\hline \text { Sales revenue } & & 9,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Accounts receivable } & 9,000 & \\\hline \text { Sales revenue } & & 9,000 \\\hline\end{array}$$

Question 72

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.

-On April 10,Michelin received payment from the customer.How much cash was received from the customer?

A) $8,000
B) $8,730
C) $7,760
D) $2,260

Question 73

Which of the following is GENERALLY a merchandiser's major cost?

A) Salary expense
B) Buildings
C) Advertising
D) Cost of goods sold

Question 74

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.Everett paid transportation costs of $100.On November 6,2012,merchandise of $1,000 from the November 1 sale was returned.The returned merchandise had cost $600.Everett received payment for the balance of the sale on November 10,2012.

-If this were the only sales transaction of the period,what amount of Gross profit would be shown on the income statement?

A) $2,400
B) $1,800
C) $1,320
D) $3,920

Question 75

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.

-On April 10,Michelin received payment from the customer.If this were the only transaction for the period,what amount would be shown on the income statement for Net sales revenue?

A) $8,760
B) $9,000
C) $8,000
D) $7,760

Question 76

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.On April 4,the customer reported damaged goods and Michelin granted a $1,000 sales allowance.

-On April 10,Michelin received payment from the customer.If this were the only transaction for the period,what amount would be shown on the income statement for Gross profit?

A) $2,260
B) $3,500
C) $3,260
D) $3,230

Question 77

Referring to the following table,what is Net sales revenue? $$\begin{array} { | r | r | } \hline \text { Sales revenue } & \$ 460,000 \\\hline \text { Cost of goods sold } & 300,000 \\\hline \text { Operating expenses } & 85,000 \\\hline \text { Sales discounts } & 20,000 \\\hline \text { Sales returns and allowances } & 15,000 \\\hline \text { Interest revenue } & 5,000 \\\hline\end{array}$$

A) $400,000
B) $415,000
C) $425,000
D) $455,000

Question 78

Michelin Jewelers completed the following transactions.Michelin Jewelers uses the perpetual inventory system.On April 2,Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15,n/30.Michelin's cost of the merchandise sold was $5,500.

-Which of the following journal entries correctly records the Cost of goods sold?

A) $$\begin{array} { | l | r | r | } \hline \text { Cost of goods sold } & 5,500 & \\\hline \text { Accounts receivable } & & 5,500 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Sales revenue } & 5,500 & \\\hline \text { Cost of goods sold } & & 5,500 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Cost of goods sold } & 5,500 & \\\hline \text { Inventory } & & 5,500 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Inventory } & 5,500 & \\\hline \text { Cost of goods sold } & & 5,500 \\\hline\end{array}$$

Question 79

In a perpetual inventory system,merchandise returned by the customer for a refund is called a:

A) sales return.
B) sales allowance.
C) sales discount.
D) sales adjustment.

Question 80

On November 1,2012,Everett Janitorial Supply sold merchandise for $5,000,FOB destination,2/10,n/30.The merchandise cost $3,200.Everett paid transportation costs of $100.On November 6,2012,merchandise of $1,000 from the November 1 sale was returned.The returned merchandise had cost $600.Everett received payment for the balance of the sale on November 10,2012.

-If this were the only sales transaction of the period,what amount of Net sales revenue would be shown on the income statement?

A) $2,400
B) $1,800
C) $1,320
D) $3,920