109. Indicate whether each of the following statements is true or false.
_____ a) The perpetual inventory method recognizes inventory events as they occur.
_____ b) The periodic inventory method recognizes sales revenue at the end of the accounting period.
_____ c) A periodic count of inventory is necessary for the periodic inventory system, as well as for the perpetual inventory system.
_____ d) A periodic inventory system requires more detailed record keeping than a perpetual inventory system.
_____ e) With a periodic inventory system, cost of goods sold is not determined until the end of the accounting period.
110. Indicate whether each of the following statements is true or false. (Assume a periodic inventory system)
_____ a) If the balance in ending inventory is overstated, net income will be understated.
_____ b) If the balance in ending inventory is understated, retained earnings will be understated.
_____ c) If the balance in ending inventory is overstated, selling and administrative expenses will not be affected.
_____ d) If the balance in ending inventory is overstated, equity will be overstated.
_____ e) If the balance in ending inventory is overstated, assets will be overstated.