Multiple Choice Answers

Freight out is an addition to the Inventory account if the company uses the perpetual inventory method.
True
False

Michelin Jewelers completed the following transactions. Michelin Jewelers uses the perpetual inventory system. On April 2, Michelin sold $9,000 of merchandise to a customer on account with terms of 3/15, n/30. Michelin’s cost of the merchandise sold was $5,500. On April 4, the customer reported damaged goods and Michelin granted a $1,000 sales allowance. On April 10, Michelin received payment from the customer. How much cash was received from the customer?
$8,000
$8,730
$7,760
$2,260

Merchandising consists of:
manufacturing products.
providing a service.
buying and selling products.
purchasing raw materials.

In a periodic system, inventory balances and the cost of goods sold for the current period are determined:
at the time of sale.
on a frequent basis.
on the first day of each year.
when a physical inventory count is taken.

A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold 150 units for $45 each from March 1 through December 31. If the company uses the First-In, First-Out inventory costing method, what is the amount of Cost of goods sold on the December 31 income statement?
$6,750
$4,000
$3,500
$3,750
None of these is correct