This is my review to study and I need help with it

Please give me explain for each: 18 Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account. A True B False 19 Depreciation is the process of allocating the cost of a plant asset over its service life in A an equal and equitable manner. B an accelerated and accurate manner. C a systematic and rational manner. D a conservative market-based manner. 20 A merchandising company using a perpetual system may record an adjusting entry by A debiting Income Summary. B crediting Income Summary. C debiting Cost of Goods Sold. D debiting Sales Revenue. 21 The income statement for Pepe Serna Company for the year ended December 31, 2015 is as follows: PEPE SERNA COMPANY Income Statement For the Year Ended December 31, 2015 Revenues Sales Interest revenue $58,000 3,000 Total revenues Expenses Cost of goods sold Salaries and wages expense Interest expense Total expenses Net income 61,000 $33,000 13,000 1,000 47,000 $ 14,000 Prepare the entries to close the revenue and expense accounts at December 31, 2015. You may omit explanations for the transactions. Page 5 22 Glenn Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Glenn Company pays within the discount period? A $8,100 B $8,280 C $8,820 D $9,000 23 An error in the physical count of goods on hand at the end of a period resulted in a $15,000 overstatement of the ending inventory. The effect of this error in the current period is 24 Garth Company sold goods on account to Kyle Enterprises with terms of 2/10, n/30. The goods had a cost of $600 and a selling price of $1,100. Both Garth and Kyle use a perpetual inventory system. Record the sale on the books of Garth and the purchase on the books of Kyle. 25 Correcting entries are made A at the beginning of an accounting period. B at the end of an accounting period. C whenever an error is discovered. D after closing entries. 26 Inventoriable costs include all of the following except the A freight costs incurred when buying inventory. B costs of the purchasing and warehousing departments. C cost of the beginning inventory. D cost of goods purchased. 27 Detailed records of goods held for resale are not maintained under a A perpetual inventory system. B periodic inventory system. C double entry accounting system. D single entry accounting system. Page 6 28 Under the lower-of-cost-or-market basis, market is defined as current replacement cost. A True B False 29 Retailers and wholesalers are both considered merchandisers. A True B False 30 Farr Company purchased a new van for floral deliveries on January 1, 2015. The van cost $56,000 with an estimated life of 5 years and $14,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the depreciation expense for 2015? A $11,200 B $8,400 C $16,800 D $22,400 Page 7 31. The following information is for Sunny Day Real Estate: Sunny Day Real Estate Balance Sheet December 31, 2015 Cash Prepaid Insurance Accounts Receivable $ 25,000 30,000 50,000 Inventory 70,000 Land Held for Investment 85,000 Land 120,000 Buildings $100,000 Less Accumulated Depreciation (20,000) 80,000 Trademark 70,000 Total Assets $530,000 Accounts Payable Salaries and Wages Payable Mortgage Payable $ 60,000 15,000 85,000 Total Liabilities Common Sock Retained Earnings $160,000 $120,000 250,000 370,000 Total Liabilities and Stockholders' Equity $530,000 The total dollar amount of assets to be classified as current assets is A $105,000. B $175,000. C $190,000. D $260,000. 32 The specific identification method of costing inventories is used when the A physical flow of units cannot be determined. B company sells large quantities of relatively low cost homogeneous items. C company sells large quantities of relatively low cost heterogeneous items. D company sells a limited quantity of high-unit cost items. 33 A company purchased land for $90,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at A $107,000. B $90,000. C $70,000. D $102,000. Page 8 34 Indrisano's Used Cars uses the specific identification method of costing inventory. During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively. During March, two cars are sold for a total of $34,600. Indrisano determines that at March 31, the $14,400 car is still on hand. What is Indrisano's gross profit for March? A B C D $1,000. $3,400. $4,200. $8,200. 35 Which of the following assets does not decline in service potential over the course of its useful life? A Equipment B Furnishings C Land D Fixtures 36 The book value of an asset will equal its fair market value at the date of sale if A a gain on disposal is recorded. B no gain or loss on disposal is recorded. C the plant asset is fully depreciated. D a loss on disposal is recorded. 37 If errors occur in the recording process, they A should be corrected as adjustments at the end of the period. B should be corrected as soon as they are discovered. C should be corrected when preparing closing entries. D cannot be corrected until the next accounting period. Page 9 38. Pappy's Staff has the following inventory information. July 1 5 14 21 30 Beginning Inventory Purchases Sale Purchases Sale 20 units at $90 120 units at $92 80 units 60 units at $95 56 units Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis? A $5,848 B $5,860 C $6,068 D $6,346 39 The adjustments columns of the worksheet for Mandy Company are shown below. Account Titles Accounts Receivable Prepaid Insurance Accumulated Depreciation Salaries and Wages Payable Service Revenue Salaries and Wages Expense Insurance Expense Depreciation Expense Adjustments Debit Credit 800 650 770 1,200 800 1,200 650 770 ____ 3,420 3,420 Instructions a Prepare the adjusting entries. b Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each balance should be extended. Page 10 40. Fetherston Company's goods in transit at December 31 include: sales made (1) FOB destination (2) FOB shipping point purchases made (3) FOB destination (4) FOB shipping point Which items should be included in Fetherston's inventory at December 31? A B C D (2) and (3) (1) and (4) (1) and (3) (2) and (4)