Which of the following is correct: A. The Balance Sheet and Income Statement accounts are both temporary. B. The Balance Sheet measures flows, while the Income Statement measures stocks. C. The Balance Sheet measures stocks, while the Income Statement measures flows. D. None of the other answers are correct. E. The Balance Sheet accounts are temporary, while the Income Statement accounts are permanent.

A company paid its rent for three months on October 1, 2020, and recorded it in Prepaid Rent. The adjusting entry required at October 31, 2020, to recognize the rent for October will A. increase an asset account and decrease an expense account. B. increase an expense account and decrease an asset account. C. increase a revenue account and decrease an asset account. D. increase an expense account and increase a liability account.

The following are generally true of LIFO and FIFO if unit costs of inventory are rising and the firm produces (or purchases) more inventory than it sells in a given year: A. FIFO yields both a lower and more accurate measure of income. B. None of the other answers are correct. C. FIFO yields a lower measure of income, while LIFO yields a more accurate measure of income. D. LIFO yields a lower measure of income, while FIFO yields a more accurate measure of income. E. LIFO yields both a lower and more accurate measure of income. Inventory value for a manufacturer includes: A. period expenses, direct labor, and overhead. B. direct labor, raw materials, and overhead. C. raw materials, overhead, and selling expenses. D. None of the other answers are correct.