Question $1$: $10$ marks

Aart h$\mathrm{.}1$ True $=$ False statements $(3$ marks$)$

You aluaus MUST make a worksheet in addition to the income statement and statement of

rinancial position.

A pertodic inventory system requires a detalled inventory record of inventory ltems.

Non$-$current liability is money that the company will pay back within a year.

Part $1\mathrm{.}2$: Multiple Cholce Questions $(7$ marks$)$

In a company's financial report $($statement of financial position$),$ equipment is classified as

a$.$ a current asset.

b$.$ property, plant, and equipment.

c$.$ an intangible asset.

When mistakes happen in a company's accounting records, how can they be fixed by using a

correcting entry?

a$.$ A correcting entry must involve one statement of financial position account and one

income statement account.

b$.$ A correcting entry may involve any combination of accounts.

c$.$ A correcting entry is the same as a closing entry.

d$.$ A correcting entry is a required step in the accounting cyele all the time even if there is no

mistake.

Assets are the things that the company own. A current asset is

a$.$ the last asset purchased by a business.

b$.$ an asset that a company expects to convert to cash or use up within one year.

c$.$ an asset that is currently being used to produce a product or service.

d$.$ usually found as a separate classification in the income statement.

A merchandising company that sells directly to consumers is a

a$.$ wholesaler.

b$.$ retaller.

c$.$ broker.

d$.$ service company.

In the income statement, net income from operations is gross profit less

a$.$ financing expenses.

b$.$ operating expenses.

c$.$ other income and expense.

d$.$ other expenses.

cost of goods sold is determined only at the end of the accounting period in

a$.$ a perpetual inventory system.

b$.$ a periodic inventory system.

c$.$ both a perpetual and a periodic inventory system.

d$.$ neither a perpetual nor a periodic inventory system.