61.As we compare a merchandising business to a service business, the financial statement that changes the most is thebalance sheet.
a.True
b.False
62.Cost of merchandise sold is often the largest expense on a merchandising company income statement.
a.True
b.False
63.When a merchandising business is compared to a service business, the financial statement that is
notaffected bythat change is the retained earnings statement.
a.True
b.False
64.Other income and expenses are items that are
notrelated to the primary operating activity.
a.True
b.False
65.Closing entries for a merchandising business are
notsimilar to those for a service business.
a.True
b.False
66.The ratio of sales to assets measures how effectively a business is using its assets to generate sales.
a.True
b.False
BUSPROG: Analytic
67.Under the periodic inventory system, the cost of merchandise sold is equal to the beginning merchandise inventoryplus the cost of merchandise purchased plus the ending merchandise inventory.
a.True
b.False
68.In a periodic inventory system, the cost of merchandise purchased includes the cost of freight-in.
a.True
b.False
69.In the periodic inventory system, purchases of merchandise for resale are debited to the Purchases account.
a.True
b.False
70.Under the periodic inventory system, the cost of merchandise sold is recorded when sales are made.
a.True
b.False