1. The sale of inventory on account would be recorded in a sales journal.

true

false

2. Which of the following best describes the purpose of the income statement?

a. Summarize the profit-generating activities of a company that occurred during a particular period of time

b. The extent to which cash inflows exceed cash outflows

c. The current resources available to pay current obligations

d. The portion of profits paid in cash to shareholders

3. For the typical company, current assets include:

a. assets that must be fully paid for within one year from the balance sheet date (or operating cycle, If longer).

b. assets that will be used up over a period that includes many years.

c. assets that are cash, will be converted into cash, or will be used up within one year from the balance sheet date (or operating cycle, if longer).

d. all assets that were purchased using cash.