During periods of rising prices, and being primarily concerned with tax implications, most companies would select:

Select one:

a. LIFO.

b. The inventory valuation does not affect taxation.

c. FIFO.

d. Specific identification.

Question 18

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Gross profit is the difference between:

Select one:

a. The cost of merchandise purchased and the cost of merchandise sold.

b. Net sales and net income.

c. Net sales and all expenses.

d. Net sales and the cost of goods sold.

Question 19

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Publicly owned companies are:

Select one:

a. Managed and owned by the government.

b. Do not pay income tax

c. None of the above.

d. Must be not-for-profit companies.

Question 20

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Which account will not appear on an after-closing trial balance?

Select one:

a. Unearned Revenue.

b. Prepaid Expenses.

c. Dividends.

d. Retained Earnings, at the end of the period.