In the periodie inventory system, purchases of merchandise for resale are debite

Question

In the periodie inventory system, purchases of merchandise for resale are debited to the purchases account. 2. Cost of Merchandise Sold is ofter the largest expense on a merchandising company income statement. 3. When merchandise that was sold is retuned, a credit to sales returns and allowances is made. 4. The swevice fee that credit card companles charge retailers varies and is the primary reason why some businesses do not accept all credit cards. 5. A sale of $750 on account, subject to a sales tax of 6%, would be recorded as an account receivable of $750. 6. If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freuggt costs of $125, is paid within 10 days, the amount of the purchases discount is $70. 7. When companics use a perpetual inventory system, the recording of the purchase of inventory will include a debit to purchases. 8. Safeguarding inventory and proper reporting of the inventory in the books are the reasons for controlling the inventory. 9. During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method. 10. During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues. 11. Unsold consigned merchandise should be included in the consignee's inventory. 12. If ending inventory for the year is understated, net income for the year is overstated. 13. The Sarbanes-Oxley Act requires that financial statement of all public companies report on management conclusions about the effectiveness of the company's internal control procedures.

Explanation / Answer

1-true

2-true

3-false

4-true

5-true

6-false

7-true

8-false

9- true

10-true

11-false

12-false

13-true

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