True/False

Truel False Questions 30 points 1. Permanent (or real) accounts report on activities related to one or more future accounting periods. 2. Income Summary is a temporary account only used for the cosing process. -3. Closing entries result in net income or net loss being transferred to the owner's capital account. 4. The post-closing trial balance is a list of permanent and temporary accounts and their balances from the ledger after all dosing entries have been journalized and posted. 5. A reversing entry is an optional journal entry made on the first day of an accounting period. 6. The normal operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services 7. The profit margin shows the percentage of each sales dollar that results in net income. 8. Asset turnover measures how efficiently sales are used to produce assets. 9. The debt to equity ratio shows the proportion of a company's assets financed by creditors and the proportion financed by the Owner, 10. Return on equity is the ratio of net income to average assets. 11. Market in the term LCM is defined as the current replacement cost of purchasing the same inventory items in the usual manner. 12. The first-in, first-out (FIFO) method of assigning costs to both inventory and cost of goods sold assumes that inventory items are sold in the order acquired. 13. An advantage of the weighted average inventory method is that it tends to smooth out erratic changes in costs. 14. The UFO method of inventory valuation can result in a company's ending inventory being valued at less than the inventory's replacement cost because LIF0 inventory leaves the oldest costs in inventory. 15. An advantage of LIF0 is that it assigns the most recent costs to cost of goods sold, and does a better job of matching current costs with revenues on the income statement