Multiple Choice Answers

The bank reconciliation:

a. should be prepared by an employee who records cash transactions
b. is part of the internal control system
c. is for information purposes only
d. is sent to the bank for verification

Which financial statement is often presented in a downward sequence with three sections, beginning with assets?

a. Balance sheet
b. Statement of Retained earnings
c. Statement of Cash Flows
d. Income statement

The adjustment to record inventory shrinkage would increase Merchandise Inventory.

True
False

What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?

a. gross profit
b. income from operations
c. net income
d. gross sales

The inventory system employing accounting records that continuously disclose the amount of inventory is called:

a. retail
b. periodic
c. physical
d. perpetual