Reference no: EM132788362

TRUE if the statement is correct. Write FALSE if the statement is incorrect and identify the word/group of words that made the statement incorrect.

Problem 1: Under the periodic inventory system, Cost of Goods Sold is treated as an account.

Problem 2: Under the periodic inventory system, the Purchases account is used to accumulate all purchases of merchandise for resale.

Problem 3: A physical inventory is usually taken at the end of the accounting period.

Problem 4: Goods should be recorded at their list price less any trade discounts involved.

Problem 5: Under the perpetual inventory system, the cost of merchandise is debited to Merchandise Inventory at the time of purchase.

Problem 6: Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.

Problem 7: Merchandise Inventory could include goods that are in transit.

Problem 8: Transportation Out is included in the Cost of Goods Sold calculation.

Problem 9: The bill of lading is a document prepared by the seller detailing the terms of delivery.

Problem 10: Under the periodic inventory system, purchases of merchandise are not recorded in the Merchandise Inventory account.