Multiple Choice Identify the choice that best completes the statement or answers the question. 1. 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. Credit to Sales for $800 b. debit to Cash for $800 c. Debit to Sales Discounts for $16 d. Debit to Accounts Receivable for $784 2. The inventory system employing accounting records that continuously disclose the amount of inventory is called a. perpetual b. periodic retail d. physical 3. Dorman Co. sold merchandise to Smith Co. on account, $18,000, terms 2/15, net 45. The cost of the merchandise sold is $15,500. Dorman Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions? a. $15,925 b. $16,250 $14,100 d. $13,818 c. c. c. 4. If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a a. debit memo b. sales invoice credit memo d. purchase invoice 5. Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense? a. selling expense b. administrative expense c. miscellaneous expense d. other expense 6. The primary difference between a periodic and perpetual inventory system is that a a. periodic system determines the inventory on hand only at the end of the accounting period b. periodic system keeps a record showing the inventory on hand at all times C. periodic system records the cost of the sale on the date the sale is made d. periodic system provides an easy means to determine inventory shrinkage