1 .The entry to record the cost of inventory sold includes a credit to cost of goods sold. True False . 2. The faster the sale of inventory and the collection of cash, the higher the profits will be for a business. True False 3. In the closing entry process, the sales returns and allowances account is credited. Answer True False 4. Operating expenses are divided into administrative expenses and selling expenses on the income statement. True False 5. A merchandiser purchases inventory on account under a perpetual inventory system with terms of 2/10 n/30. The merchandiser would: debit purchase discounts on date of purchase if the discount is take credit inventory on date of payment if the discount is not taken credit inventory on date of payment if the discount is taken debit purchase discounts on date of purchase if the discount is not taken Ending inventory equals the number of units on hand multiplied by the unit cost. Answer True False . Question 7 Sales revenue minus sales returns and allowances and sales discounts equals gross profit income from operations cost of goods sold net sales Question 8 Under a perpetual inventory system, the adjusting entry to account for inventory shrinkage would include a: credit to miscellaneous expens credit to cost of goods sold credit to inventory debit to miscellaneous expense Question 9 In period of increasing prices, FIFO produces lower cost of goods sold and higher gross Profit than LIFO. Answer True False . Question 10 An error in ending inventory carries over into the next period. Answer True False . Question 11 Which of the following inventory costing methods is the LEAST likely to mimic the actual physical flow of inventory? Specific unit cost Average cost Last in first out First in first out Question 12 Which of the following principles require the application of the lower-of-cost-or-market rule? Accounting conservatism Materiality concept Disclosure principle Consistency principle Question 13 A company makes two errors in the physical count of inventory. Beginning inventory was understated by $28,000 and ending inventory is understated by $43,000. Which of the following will be the net effect of the two errors? Net income for the following year is understated by $43,000. Net income for the following year is overstated by $71,000. Net income for the following year is understated by $15,000. Net income for the following year is overstated by $15,000. .Question 14 A deposit in transit has been recorded by the company but not by the bank. True False . Question 15 To maintain effective internal control, all incoming mail should be opened by a mailroom employee who has access to the accounting records. Answer True False . Question 16 The initial entry to establish a petty cash fund involves a debit to cash and a credit to petty cash. True False . Question 17 Internal control does not: help safeguard the assets a business uses in its operations guarantee a company will not go bankrupt encourage adherence to company policies promote operational efficiency Question 18 A check drawn by the depositor for $205 in payment of a liability was recorded in the journal as $502. This item would be included in the bank reconciliation as a(n): deduction on the bank side addition on the bank side deduction on the books side addition on the books sid Question 19 The entry to reimburse the petty cash fund includes a: Answer credit to petty cash debit to cash in bank debit to various expenses and assets debit to petty cash Question 20 Under the allowance method, the entry to write off an account that has been deemed uncollectible has no effect on the total asset's of the firm. True False . Question 21 The allowance method and the direct write-off method are both methods of aging accounts receivable. True False . Question 22 A written promise to pay a specified amount of money at a particular future date is referred to as a promissory note. r True False . Question 23 One method of establishing control over collections of accounts receivable is to: Answer allow no one but the bookkeeper to handle cash designate an authorized check signer establish a bank lock box set up a petty cash fund Question 24 Using the balance sheet approach to estimate uncollectibles, accounts, which are 90 days old,are: Answer less likely to be collected than accounts 30 days old equally likely to be collected as accounts 360 days old more likely to be collected than accounts 30 days old less likely to be collected than accounts 360 days old Question 25 Under the direct write-off method, the entry to record an uncollectible account has the following effect on the financial statements: increases expenses and decreases liabilit decreases net income and decreases assets decreases assets and increases owner's equity increases expenses and increases assets Read more: For neo 1 .The entry to record the cost of inventory sold - JustAnswer http://www.justanswer.com/homework/5qfcc-neo-1-the-entry-record-cost-inventory-sold.html#ixzz2GNuU1xHr