Part I  True or False. State and write true or false depending on what you understand each of the statements implies. assertions. Be sure to write one of two (true or false) alternatives, otherwise your answer will be incorrect Much success!!!!!!

1._____ Savings accounts are usually classified as cash in the Verification Statement  Balance

Sheet. (Savings accounts are generally classified as cash on the balance sheet.)

2._____ Certificates of Deposit are generally classified as cash in the Testing Status

- Balance sheet. (Certificates of deposit are generally classified as cash on the balance sheet.)

3._____ Short-term, highly liquid investments may be included under cash on the Balance Sheet.

Checking  Balance Sheet. (Short-term highly liquid investments may be included with cash in the

balance sheet).

4._____Under the gross method, sales discounts are presented as a deduction from sales. (In the

gross method, sales discounts are reported as a deduction from sales).

5._____ In all cases where FIFO is used, the cost of goods sold would be the same,

regardless of whether a perpetual or periodic system is used. (In all cases when FIFO is used, the

the cost of goods sold would be the same whether a perpetual or periodic system is used).

6._____ Many companies use LIFO for both tax penalties and internal reporting. (many companies

use LIFO for tax and internal reporting purposes).

7._____ The use of LIFO provides a tax benefit in an industry where unit costs

tends to decrease as production increases. (The use of LIFO provides a tax benefit in a

industry where unit costs tend to decrease as output increases).

8._____ The LIFO compliance rule requires that if a business uses LIFO for tax purposes,

You must also use LIFO for financial accounting penalties. (The LIFO compliance rule requires that if a

company uses LIFO for tax purposes, you must also use LIFO for financial accounting purposes).

9._____ The LIFO method is inappropriate when unit costs tend to decrease as you increase

the production. (LIFO is inappropriate where unit costs tend to decrease as output increases.)