3. What is a _merchandise account_? What accounts are substituted for the merchandise account in modern bookkeeping? In what particular is the use of these accounts an improvement over the older method of using a merchandise account? 4. Name and define four classes of assets, giving examples of each. 5. Give two examples of fixed assets in one business which become floating assets in another business. Give two examples of floating assets in one business which become fixed assets in another business. 6. What are revenue receipts? revenue expenditures? What accounts are designated by the term _revenue accounts_? 7. What is the broad term by which all revenue expenditure accounts are designated? Name and define five commonly used subdivisions of this account. 8. What is meant by _journalizing_? When purchase and sales books are used, what class of entries are made in the journal? Give three examples of journal entries involving transfers of value from one account to another. 9. What is a _three column journal_, and how is it used? 10. Journalize the following transactions: April 15. Bought from Reliance Mills, on account 94 bbls. flour @ $4.75 Sold to D. H. Pointer, on account 15 bbls. flour @ 5.35 Sold to H. S. Fleming, on account 60 bu. wheat @ 1.05 April 16. Gave to Reliance Mills, my note payable in 60 days, to balance account Received from D. H. Pointer note for 30 days to balance account. 11. What is meant by _posting_? Explain the operation of posting, using one of the above transactions as an example. 12. In what particular does posting from the cash book differ from posting from the journal? Explain this difference, and illustrate with two examples. 13. What is a _trial balance_, and for what purpose is it taken? What does a trial balance prove? 14. What are _cash discounts_? Are cash discounts a proper charge against capital, or against revenue? Why? 15. Name two ways of treating cash discounts in the ledger, based on your answer to the previous question. 16. Illustrate two methods of entering cash discounts allowed in the cash book; illustrate the customer's ledger account as it would appear after posting the credit, from each of these entries. Which method, in your opinion, most clearly shows how the account was settled? 17. Should cash discounts earned be credited against the cost of goods purchased, or credited to profits? Why? 18. What is a _profit and loss account_? What does the balance of this account represent? How frequently is the balance of profit and loss account transferred? To what accounts, in a proprietorship or partnership? in a corporation? 19. What is a _trading account_, and what is its purpose? With what classes of items should trading account be debited and credited? How is the trading account constructed?