161. ABC purchases inventory for $2,000 and incurs shipping costs of $100 for the goods to be delivered. To record this transaction, the company debits Inventory for $2,000, debits Selling Expenses for $100, and credits Cash for $2,100. Which of the following statements is correct?
     1. Revenues are understated. B) All accounts are accurately stated.

C) Net income is overstated. D) Assets are understated.

162. Specific Identification is used by:
     1. Starbucks B) Manufacturers C) Grocery Stores D) Car dealers

163. If a company understates its count of ending inventory in Year 1, which of the following is true?
     1. Profit is correct in Year 2.
     2. Costs of goods sold is understated at the end of Year 1.
     3. The balance of retained earnings is correct at the end of Year 2.
     4. The balance of retained earnings is overstated at the end of Year 1.

164. ABC correct ending balance for the inventory account at the end of 2018 should be $5,000, but the company incorrectly stated it as $3,000. In 2019, ABC correctly recorded its ending balance of the inventory account. Which one of the following is true?
     1. Retained earnings are understated by $2,000 in 2019.
     2. Cost of goods sold is understated by $2,000 in 2018.
     3. Gross profit is overstated by $2,000 in 2018.
     4. Gross profit is overstated by $2,000 in 2019.

165. Executory Contracts are generally
     1. Recorded with an adjusting entry B) Recorded with a closing entry

C) Not recorded D) Recorded with a transaction entry