22. The unadjusted trial balance:

A. indicates whether or not errors were made in recording transactions.

B. generally lists account names in alphabetical order.

C. is a preliminary financial statement for external and internal users.

D. is created to determine that total debits equal total credits.

23. When the market value of inventory drops below the cost recorded in the financial records, applying the lower of cost or market (LCM) rule causes:

A. an increase in net income.

B. no change in net income, other things being equal.

C. a decrease in cost of goods sold.

D. a decrease in total assets.

24. Assume that the direct method is used to prepare the operating activities section of the statement of cash flows. Which of the following statements is correct concerning a decrease in Accounts Payable?

A. Since the cash payments were more than credit purchases, the decrease must be subtracted from purchases to cash payments to suppliers.

B. Since the cash payments were less than credit purchases, the decrease must be added to purchases to calculate cash payments to suppliers.

C. Since the cash payments were less than credit purchases, the decrease must be subtracted from purchases to calculate cash payments to suppliers.

D. Since the cash payments were more than the credit purchases, the decrease must be added to purchases to calculate cash payments to suppliers.

25. If the company's accountant mistakenly recorded a $70 deposit as $109, the error would be shown on the bank reconciliation as a(n):

A. $39 addition to the book balance.

B. $39 deduction from the book balance.

C. $109 addition to the book balance.

D. $109 deduction from the book balance.