Select the correct option:

1. Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a

a. debit to Sales

b. debit to Merchandise Inventory

c. credit to Merchandise Inventory

d. credit to Accounts Receivable

2. If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a

a. sales invoice

b. purchase invoice

c. credit memo

d. debit memo

3. Merchandise with a sales price of $800 is sold on account with term 2/10, n/30. The journal entry to record the sale would include a

a. debit to Cash for $800

b. Debit to Sales Discounts for $16

c. Credit to Sales for $800

d. Debit to Accounts Receivable for $784

4. When comparing a retail business to a service business, the financial statement that changes the most is the

a. Balance Sheet

b. Income Statement

c. Retained Earnings Statement

d. Statement of Cash Flow