When uncollectible accounts expense is recorded under the allowance method ____.
1. Net income will be unaffected, and assets and stockholders' equity (retained earnings) will decrease

2. Net income, assets and stockholders' equity (retained earnings) will decrease

3. Net income, assets and stockholders' equity (retained earnings) will be unaffected

4. Net income and assets will decrease and stockholders' equity (retained earnings) will be unaffected



Exhibit 8-1
Use the following data for the month of April.


April 1 Beginning Inventory 100 units @ $4
April 2 Sales 50 units
April 3 Purchases 300 units @ $6
April 10 Sales 350 units
April 21 Purchases 400 units @ $8
April 28 Sales 200





Refer to Exhibit 8-1. Assuming a periodic inventory system is used, what is ending inventory under LIFO?




1. $1,000

2. $1,100

3. $1,350

4. $1,600

Describe using example ledger a/c how a trial balance is extracted from ledger a/c and explain the purpose of the trial balance in terms of the problems it can be used to spot.

A trial balance is a listing of all of your accounts, one cloumn is for Debit Balances and the other column is for credit balances. At the end of the columns you total your Debits and you total your credits. Your Debits must equal your Credits!!

A trial balance is used to verify that your debits are equal to your credits. On other words that your debit entries and your credit entries are in balance.