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An advantage of using the periodic inventory system is that it
requires less record keeping than the perpetual inventory system.
Question 2
The terms 2/10, net/30 mean that a 2 percent discount is allowed
on payments made within the 10 days discount period.
Question 3
Sales allowances and Sales discounts are both designed to
encourage customers to pay their accounts promptly.
Question 4
Freight-out appears as an operating expense in the income
statement.
Question 5
With the periodic inventory system, goods available for sale must
be calculated before cost of goods sold.
Question 6
Merchandising companies that sell to retailers are known as
Question 7
The primary source of revenue for a wholesaler is
Question 8
Which of the following is a true statement about inventory
systems?
Question 9
Which of the following items does not result in an adjustment in
the merchandise inventory account under a perpetual system?
Question 10
Farwell Company purchased merchandise with an invoice price
of $2,000 and credit terms of 1/10, n/30. Assuming a 360 day year,
what is the implied annual interest rate inherent in the credit
terms?
Question 5