All true and false

1Accounting information helps people make better decisions about the performance of a business.

2. Internal operating functions include research and development, distribution, and human resources.

3. If an account was incorrectly debited for $300 instead of correctly credited for $300, the account is out of balance by $300.

4. The primary qualitative characteristics of financial information are relevance and faithful representation.

5. Although, in a sole proprietorship, owner investments are not recorded as revenue, any withdrawals are recorded as expenses.

6. When a business sends a bill for $200 to a customer for services rendered, the journal entry to record this transaction will include a $200 credit to Accounts Receivable.

7. A ledger is a type of account.

8. Before making adjusting entries at the end of an accounting period, some accounts may not show proper financial statement amounts even though all transactions were correctly recorded.

9. Financial statements prepared from a work sheet offer more information than if it is not used and statements are just prepared from an adjusted trial balance.

10. Gallery Corp. paid $6,000 for a six-month insurance policy for the company van. The policy coverage began on January 1. On January 31, $1,000 of insurance expense must be reported.

11. An account balance is the difference between the increases and decreases recorded in an account.

12. Adjusting entries are normally entered in the General Journal before they are recorded on the work sheet.

13. A business that has inventory items that are ordinarily interchangeable is required to use the specific identification method of assigning costs to inventory.

14. A merchandiser earns profit by buying and selling merchandise.

15. In a perpetual inventory system, the net cost of purchases is accumulated in the Inventory account.

16. The inventory cost flow assumption that is used cannot have a material impact on the financial statements.

17. A wholesaler is a company that buys products from manufacturers and sells them to consumers.

18. Most businesses apply the lower of cost and net realizable value rule to groups of similar or related items.

19. Trekking Company has inventory with a net realizable value of $217,000 and a cost of $241,000. According to the guidance provided by the principle of faithful representation, the inventory should be written down to $217,000.

20.The FastForward Company balance sheet shows cash $5,000, accounts receivable $7,000, office equipment $3,000, and accounts payable $4,000. What is the amount of equity?