Retailers and wholesalers are both considered merchandisers.

• TRUE
• FALSE

The steps in the accounting cycle are different for a merchandising company than for a service company.

• TRUE
• FALSE

Sales minus operating expenses equals gross profit.

• TRUE
• FALSE

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs.

• TRUE
• FALSE

A periodic inventory system requires a detailed inventory record of inventory items.

• TRUE
• FALSE

Freight terms of FOB Destination means that the seller pays the freight costs.

• TRUE
• FALSE

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

• TRUE
• FALSE

Sales revenues are earned during the period cash is collected from the buyer.

• TRUE
• FALSE

The Sales Returns and Allowances account and the Sales Discount account are both classified as expense accounts.

• TRUE
• FALSE

The revenue recognition principle applies to merchandisers by recognizing sales revenues when they are earned.

• TRUE
• FALSE