6 When a business keeps its accounting records assuming that it will make money and continue in business indefinitely, it is applying the Consistent Reporting accounting concept. True False QUESTION 7 A cash purchase transaction decreases the balance of the cash account. True False QUESTION 8 The selling price of merchandise must be greater than the cost of merchandise for a business to make a profit. True False QUESTION 9 The cost account Purchases is a permanent account. True False QUESTION 10 Keeping the reports and financial records of a business separate from the personal records of the partners is an application of the accounting concept A. Going Concern B. Business Entity C. Historical Cost D. Objective Evidence QUESTION 11 When merchandise is withdrawn by a partner, the A. source document for the transaction is a check. B. balance of the purchases account is increased. C. other partner must also take an equal amount of merchandise out of the business for personal use. D. transaction will increase the balance of the drawing account and decrease the balance of the purchases account. QUESTION 12 The source document for recording a purchase on account transaction is a A. purchase invoice. B. sales invoice. C. memorandum. D. check. QUESTION 13 The purchases account is classified as A. an expense account. B. an asset C. a liability D. a cost account. account. account. QUESTION 14 To apply the Historical Cost accounting concept, merchandise purchased for sale should be recorded at its actual value even if a special sale price is granted. True False