1.

The cash basis of accounting is more useful than the accrual basis as the balance in the bank account is always reflected in the financial statements. True False

2. The Vaughn Bakery purchased $6620 worth of baking supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the baking supplies indicated only $3400 on hand. The adjusting entry that should be made by the company on June 30 is debit Baking Supplies Expense, $3220; credit Baking Supplies, $3220. debit Baking Supplies, $3220; credit Baking Supplies Expense, $3220. debit Baking Supplies Expense, $3220; credit Baking Supplies, $3400. debit Baking Supplies Expense, $3400; credit Baking Supplies, $3400.

3. Purchase discounts are offered to customers for the early payment of the balance due. True False

4. Assuming the company uses the earnings approach for revenue recognition, the sales revenue section of an income statement for a retailer would not include sales. cost of goods sold. net sales. sales returns and allowances.