market value of plant and equipment during the accounting period. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 9) A line of credit creates a liability for the borrower when it is granted by the bank. 9) 10) A line of credit is an advance agreement by a bank to lend a company any amount of10) money up to a specified limit. 11) Estimating the useful life and residual value of an asset is the responsibility of the firm of independent accountants that audit the company. 12) The term "plant assets" refers to long-lived assets acquired for use in business 12) operations, rather than for resale to customers. 13)T A corporation continues in existence even if a stockholder dies or withdraws from the organization. 14) Cost of goods sold is an expense shown separately from other expenses in an 14 income statement. 15) Inventory shrinkage refers to unrecorded decreases in inventory resulting from 15) breakage, theft, and shoplifting. 16) Net Sales is computed as total sales revenue less sales returns and allowances 17) If a transaction takes place with terms 2/10, n/30, the "10 refers ess 16) sales discounts. to the percent 17) discount a purchaser can take if payment is made within 2 days. 18) One of the purposes of adjusting entries is to convert assets to expenses. 19) In a periodic inventory system, the Inventory and Cost of Goods Sold accounts are 18) T kept up-to-date throughout the accounting period. 20) The balance sheet is prepared first because if it balances, all he accounting 20) information is correct and can be used to prepare the other financial statements. 21) Companies need not disclose information that may have a damaging effect on the business, such as product liability lawsuits. 22) The additional paid-in capital account represents profit to the corporation and, as 22) such, it is credited to Retained Earnings. 23) F 23) Inventory is a relatively liquid asset and usually appears above Accounts Receivable on the balance sheet. 24) When par value capital stock is issued, capital stock is credited with the par value of 24) the shares issued, regardless of whether the issuance price is equal to par, more than par, or less than par. 25) T / 25) Every adjusting entry involves the recognition of either revenue or an expense