105. Indicate whether each of the following statements is true or false.
_____ a) A cash discount is extended to reward the buyer for purchasing large quantities of goods.
_____ b) A purchase discount refers to a cash discount as seen from the seller's viewpoint.
_____ c) A sales discount refers to a cash discount as seen from the buyer's view.
_____ d) In a perpetual inventory system, a sales discount is recorded as an expense.
_____ e) In a perpetual inventory system, a purchase discount is recorded as a revenue.
106. Indicate whether each of the following statements is true or false.
_____ a) A multistep income statement displays a single comparison of total revenues and total expenses.
_____ b) A single-step income statement shows the computation of gross margin as well as separate lines for such things as gains or losses, discontinued operating activities and extraordinary items.
_____ c) Interest is normally shown as a separate item on the multistep income statement.
_____ d) The treatment of interest on the multistep income statement is consistent with the treatment of interest on the statement of cash flows.
_____ e) The statement of cash flows is required to show interest as an operating item.