51) Interest Expense is:

A) a cost of borrowing money.

B) included in the “Other Expenses” on the income statement.

C) has a normal debit balance.

D) All of the above are correct.

52) Mortgage Payable:

A) has a debit balance.

B) has a credit balance.

C) shows the amount paid on a mortgage.

D) is an unsecured loan.

53) Merchandise Inventory (ending) appears on both the Income Statement and the Balance Sheet.

54) If ending inventory is overstated this period, beginning inventory will be overstated in the next period.

55) The ending inventory in Year 1 is not the beginning inventory in Year 2.

56) The Income Summary account is used to adjust beginning and ending inventories.

57) In the perpetual inventory system, it is not necessary to take a physical inventory at the end of the period.

58) The beginning inventory is assumed to be sold; therefore, it is added to cost of goods sold.

59) Unearned Rent Revenue is a income statement account.

60) When the adjustment is made for depreciation, both the Depreciation Expense account and Accumulated Depreciation account are increased.

 

 



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