21. When goods are returned, the seller reduces the account receivable and increases the merchandise inventory accounts reported on the statement of financial position.
22. When goods are returned, the seller records the returned merchandise at its market value on the statement of financial position.
23. Closing entries impact the income statement but do not have an impact on the statement of financial position.
24. Under International Financial Reporting Standards (IFRS) use of a worksheet by a merchandising company is strictly optional.
25. A company's unadjusted balance in Inventory will usually not agree with the actual amount of inventory on hand at year-end.
26. For a merchandising company, all accounts that affect the determination of income are closed to the Income Summary account.
27. A merchandising company has different types of adjusting entries than a service company.
28. Net sales is sales revenue less sales returns and allowances and sales discounts.
29. Other income and expense excludes revenues and expenses that are unrelated to the company’s main line of operations.
30. Operating expenses are different for merchandising and service companies.