Financial Accounting Ch. 4,5,6 True or False

True

Retailers and wholesalers are both considered merchandisers

True

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances

True

Freight terms of FOB destination means that the seller pays the freight cost

True

Closing entries are journalized after adjusting entries have been journalized

False

Closing revenue and expense accounts to the income summary account is an optional book keeping procedure

True

Goods out on consignment should be included in the inventory of the consignor

True

An error that overstates the ending inventory will also cause net income for the period to be overstated

True

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs

True

Goods that have been purchased FOB destination but are in transit should be excluded from a physical count of goods

False

The sales returns and allowances account and the sales discount account are both classified as expense accounts

True

Under the lower-cost or market basis, market is defined as current replacement cost

True

In a period of falling prices, the LIFO method results in a lower cost of goods sold than the FIFO method

True

The first-in, First-out (FIFO) inventory method results in an ending inventory valued at the most recent cost