16.

Generally accepted accounting principles encompass the conventions, rules and procedures necessary to define accepted accounting practice at a particular time.

		a. True
		b. False

17.

If ending inventory is miscounted, resulting in an understatement of ending inventory on the Balance Sheet at the end of this period, then the Net Income for this period will be overstated.

		a. True
		b. False

19.

Edson Co. purchased 100 shares of treasury stock for $50 per share. The company later sold the shares for $55 per share. The entry to record the sale of the shares would include a

		a. credit to Paid-in Capital from Treasury Stock for $500.
		b. credit to Gain on Sale of Treasury Stock for $500.
		c. credit to Treasury Stock for $5,500.
		d. debit to Cash for $5,000.

21.

The journal entry to record 31 days of accrued interest at the end of the month on a $10,000 note payable at 9% interest would include (use a 365-day year to calculate interest):

		a. debit Interest Expense for $76.44
		b. debit Interest Payable for $900.00
		c. debit Interest Expense for $900.00
		d. debit Interest Payable for $76.44