34) 34) Better Deals, Inc. has 6 units in inventory on December 31. The units were purchased in November for $165 each. The price lists from the suppliers indicate that the same items would now cost the company a total of $1,020. What would be the amount reported as ending Merchandise Inventory on the balance sheet? A) $2,010 B) $335 C) $990 D) $1,020 35) Ending inventory for the current accounting period is overstated by $2,700. What effect will this error have on Cost of Goods Sold and Net Income for the current accounting period? Cost of Goods Sold Overstated Net Income Overstated Cost of Goods Sold Understated Net Income Overstated Cost of Goods Sold Overstated Net Income Understated D) Cost of Goods Sold Understated Net Income Understated 36) 36) Public companies A) must issue an internal control report which states that the outside auditor is responsible for the adequacy of internal controls B) are audited by accounting firms that do not also provide certain consulting services to the public company C) are required by the Financial Accounting Standards Board to maintain a system of internal controls D) are overseen by the Public Company Accounting Oversight Board 37) Regarding the gross method of handling credit and debit card transactions, which of the following statements is correct? A) The total sale amount is deposited on the date of the actual sale. B) The processing fees for all transactions processed for the month are deducted from the company's bank account, often on the last day of the month. C) On the date of sale, the Sales Revenue account is credited for the amount of sale less the processing fee. D) The journal entry on the date of sale is identical to a journal entry made for a sale on account. 38) A receivable occurs when a business A) loans money to another party B) sells goods or services to another party on account C) has a monetary claim against a business or individual D) All of the statements are correct. 39 39) Which of the following statements is true of the direct write-off method? A) GAAP requires public companies to follow the direct write-off method. B) It provides better matching of revenues with expenses. C) It results in more accurate net income than any other method. D) It is only suitable for small companies that have very few uncollectible receivables