Section A: Multiple Choice Questions (20 Q 0.5M 10 MARKS) Encircle the alphabet corresponding to the correct answer. For example, if the answer is 'e' then Transfer all your answers in the Answer Sheet for Section A 1. In which of the following financial statement, do we show merchandise inventory account? a) Cash flow statement b) Statement of retained earnings c) Income statement d) Statement of balance sheet 2. The Merchandise Inventory is: a) The net assets after deducting current liabilities b) The net sales after deducting sales returns c) The cost of goods available for sale at any given time d) The net purchase after deducting purchase returns 3. In credit terms of 3/15, n/60, "15" represents the a) Percent of the cash discount b) Number of days available in the discount period c) Full amount of the invoice d) Number of days when the entire amount is due Identify the major expense for a merchandising business. a) Selling expenses b) Salary c) Rent d) Cost of goods sold 5. Which of the following items normally has a 'debit balance'? a) Revenue b) Assets c) Sales d) Capital