A. Always true B. Sometimes true C. Never true D. Marites facts only 32. Sale of equipment is the primary source of revenue of service business A. Always true B. Sometimes true C. Never true D. Marites facts only 33. This refers to the period of time which the customer is allowed for payment of purchases on account. a. discount period b. credit term c. credit period d. term of payment 34. This refers to the price of merchandise after deducting the trade discount. a. discount price b. invoice price c. list price d. suggested retail price 35. You are given the credit term of 2/10, n/30, which is true in the statement below? a. I can avail 2% discount if I pay within 10 days from the date of sale. b. I can only pay the account within 10 days. c. I can avail the 2% discount within 30 days d. I can avail the 2% discount after 10 days from the date of sale. 36. Account title used for payment of transportation cost by the buyer A. Freight In B. Freight Out C. Fare D. Famasahe 37. Account title used merchandise return accepted by the seller A. Sales Return and Allowances B. Sales discount C. Purchase Return and Allowances D. Purchase discount 38. Statement I: Cash discounts encourage the buyer an early payment. Statement II: Trade discounts encourage the buyer in bulk buying. a. Both statements are true b. Only statement ll is true c. Only statement | is true d. Both statements are false 39. Statement I: Credit memo is issued for the defective merchandise by the buyer. Statement II: Debit memo is issued for the defective merchandise by the seller. a. Both statements are true b. Only statement ll is true c. Only statement | is true d. Both statements are false 40. On May 10 Olive Oyl Company sold merchandise inventory with invoice price of P19,450 to Kanola Oil Company . Terms: 3/15,n/30. How much is the sales discount if the company paid their account on May 25? a. P583.50 b. P585.30 c. P2,917.50 d. PO 41. What is the basic difference between the income statement of merchandising business and service business? a. inclusion of merchandise inventory b. inclusion of cost sold c. equity section d. profit figure 42. The entry to close the income summary when there is net income would include a a. debit to drawing b. debit to capital c. credit capital d. credit to drawing 43. What do we call the excess of net sales over the cost good sold? a. gross profit b. operating profit c. net income d. operating results 44. Which of the following is not considered in computing the net purchases? a. Purchases b. Purchases returns and allowances c. Transportation paid on goods by the seller d. Transportation paid on goods by the customer 45. The amount of goods available for sale during the year depend on the amounts of a. Beginning merchandise inventory and ending merchandise inventory b. Beginning merchandise inventory and cost of goods sold c. Beginning merchandise inventory and net purchases d. Beginning merchandise inventory and net sales46. Assuming that net purchase was P500,000 during the year and that ending merchandise inventory was P10,000 and the beginning balance was P25,000. How much is the cost of goods sold? a. P515,000 b. P510,000 c. P525,000 d. P475,000 For questions 47-50 use the following information below. Account Title Debit Credit Sales 200,0005 0 meth boneg Jnuggeth nemveg lo Sales return and allowances 10,000 Sales discount 5,000 Be .D Purchases 60,000 Purchase return and allowances sa to els 3,000 Purchase discount 6,000 Beginning merchandise inventory P55,000 Ending merchandise inventory P35,000 gril yd beigebos muist eatonericnem beau elfil inggodA 47. How much is the net sales? a. P235,000 b. P15,000 c. P185,000 d. P140,000 conewolle bris mules salsa ongib need Vinemelele 48. How much is the net purchases? a. P75,000 b. P69,000 c. P9,000 d. P51,000 49. How much is the total goods available for sale? a. P106,000 b. P209,000 c. P75,000 d. P20,000 50. How much is the total cost of goods sold? a. P20,000 b. P209,000 c. P75,000 d. P71,000