True$/$False

Indicate whether the statement is true or false.

Under a periodic inventory system, the merchandise on hand at the end of the year is determined by a

physical count of the inventory.

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$2.$ A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called

cash discounts.

$3.$ In a periodic inventory system, the cost of merchandise purchased includes the cost of freight$-$in$.$

$4.$ As we compare a merchandise business to a service business, the financial statement that changes the most is

the Balance Sheet.

$5.$ The seller may prepay the freight costs even though the terms are FOB shipping point.

$6.$ Net sales is equal to sales minus cost of merchandise sold.

$7.$ Under the perpetual inventory system, a company purchases merchandise on terms $2/10,$ n$/30.$ If payment is

made within $10$ days of the purchase, the entry to record the payment will include a credit to Cash and a

credit to Purchase Discounts.

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$8.$ A buyer who acquires merchand