22. Using periodic inventory (stock) system, a purchase of stock merchandise on credit will be journalised as: (a) A debit in the respective purchases account and a credit to the respective liability account (b) A debit to respective stock account and a credit to the respective liability account (c) A credit to respective purchases account and a credit to a respective liability account (d) None of the above 23. Assume that cash is paid for insurance to cover a three-year period. The recommended debit and credit are: (a) Debit insurance expenses, credit cash (b) Debit prepaid insurance, credit cash (c) Debit cash, credit insurance expense (d) Debit cash, credit prepaid insurance 24. The agreement of the debit and credit totals of the trial balance does not give assurance that: (a) An amount has been debited to a wrong account (b) An amount has been credited to a wrong account (c) Both the debit and credit aspect of a transaction has not been performed (d) All of the above 25. Which of the following is the purpose of adjusting entries? (a) To record all payments and receipts in accounts (b) To record prepayments and accrued expenses in accounts (c) To record expenses not recorded and expenses paid in advance (d) To record expenses incurred and revenue earned during accounting year