Question 2 Merchandise Inventory account is regularly updated every time there is movement in merchandise under the periodic inventory system. True 1 pts False Question 3 Adjusting entries are journal entries made after the financial statements have been prepared. True False 1 pts Question 4 Allowance for Doubtful Accounts is a contra asset account which reduces the amount of accounts receivable shown on the Statement of Financial Position to its net realizable value. True 1 pts False Question 5 Using the liability method of recording Unearned Revenue, the advance collection is initially recorded to an income account. True False 1 pts Question 6 Since buildings and equipment are used for more than one year, their cost is allocated over the periods they benefit. This is an application of the business entity concept. True 1 pts False D Question 7 Sales returns and allowances and sales discounts are deducted from net sales before deducting the cost of goods sold to arrive at the gross profit. True 1 pts False Question 8 Net income and withdrawals have the same effect when preparing the Statement of Changes in Equity. True 1 pts False Question 9 Sale of land at cost is a transaction under financing activity. True False 1 pts Question 10 Posting closing entries would bring the balance of nominal accounts to zero. True O False 1 pts