1. During the taking of its physical inventory on December 31, 2008, Albert’s Bike Shop incorrectly counted its inventory as $210,000 instead of the correct amount of $180,000. The effect on the balance sheet and income statement would be as follows:
a.assets and retained earnings overstated by $30,000; net income understated by $30,000.
b.assets overstated by $30,000; retained earnings understated by $30,000; no effect on the income statement.
c.assets overstated by $30,000; retained earnings understated by $30,000; net income statement understated by $30,000.
d.assets and retained earnings overstated by $30,000; net income overstated by $30,000.
2. In a merchandise business, sales minus operating expenses equals net income. True or False
3. Which of the following accounts has a normal credit balance?
a.Sales
b.Merchandise Inventory
c.Delivery Expense
d.Sales Returns and Allowances
4. Sellers and buyers are required to record trade discounts.
True or False
2007-10-17
19:13:58
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2 answers
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asked by
austin
1
in
Other - Business & Finance