Multiple choice

1. Under a perpetual inventory system, the entries to record a $1,600 sales return for a sale originally made on account, when the merchandise had a cost of $900, include a:

 a. debit to inventory for $900

 b. debit to sales returns and allowances of $700

 c. credit to cost of goods sold of $1,600

 d. credit to accounts receivable of $900   

2. Inventory and cost of goods sold appear on the:

 a. balance sheet and statement of owner's equity, respectively

 b. balance sheet and income statement, respectively

 c. statement of owner's equity and income statement, respectively

 d. income statement and statement of cash flows, respectively   

3. Revenues total $10,200, expenses total $7,300, and the owner's withdrawals account has a balance of $2,600. What is the balance in the income summary account after all closing entries are completed?

 a. $2,600 credit

 b. $2,900 debit

 c. $2,900 credit

 d. $ -0- 

4. The normal balance of accounts payable is a _____ because it is a(n) _____ account.

 a. credit, liability

 b. credit, revenue

 c. credit, owner's equity

 d. credit, asset