Author Question: If a liability was extended into the Income Statement Credit column on the work sheet, net income ... (Read 67 times)

appyboo · **on:** Jul 6, 2018

If a liability was extended into the Income Statement Credit column on the work sheet, net income would be understated.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Which of the following statements is true of the percentage markup method of indirect proof?

A) It extends the concept of application of funds to include the accumulation of assets and employs a balance sheet formula of sales minus costs equal net worth.
B) It is generally limited to wholesale establishments rather than retail establishments.
C) It requires reliable information regarding opening and closing inventories and the appropriate gross margin.
D) It focuses exclusively on expenditures made in bank deposits.

itsakadoozi · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

False

Answer to Question 2

C
Explanation: C) The percentage markup method requires reliable information regarding opening and closing inventories and the appropriate gross margin.