hi, can you please double check and see if I am correct or not?

1. a merchandiser' inventory consists of raw materials, work-in-process and finished goods and is classified as a current asset. True

2. inventory is valued on the balance sheet at the expected resale value and not the lower of cost or market. False

3. Depreciation is a cash charge to the income statement that relates to the periodic allocation of the cost of a tangible asset over its useful life. False

4. Natural resources, land used in ordinary business operations, truck held for resale by an automotive dealership and land improvements, such as parking lots and fences, are all examples of assets classified as property, plant or equipment. True


5. a sound internal control environment provides for the separation of responsibilities, recordation of all transactions, good personnel policies, adherence to managerial policies and a balanced marketing strategy. True

6. Under the corporate business formation, the equity section consists of partnership capital accounts including preferred stock and common stock. True

thank you

1) True – correct

2) False – correct

3) False – correct

4) I would go with False.

The reason being is that they include “truck held for resale by an automotive dealership”. Normally a truck is equipment, but in this case, where the business is selling automobiles, the truth would be inventory, a current asset.


5) True – correct

6) I would go with False. If you have a partnership, you don't have stock. If this is a corporation, you have stock, but no partnership accounts.

Wouldn't #1 be false? Those accounts sound like a manufacturer and not a merchandiser.

I am with Kong.

I was thinking to say False but the word wasn't coming to me.

Manufacturer…that was the word that was on the top of my tongue.

Quote:

---

Originally Posted by tjj2320

hi, can you please double check and see if i am correct or not?

1. a merchandiser' inventory consists of raw materials, work-in-process and finished goods and is classified as a current asset. True

2. inventory is valued on the balance sheet at the expected resale value and not the lower of cost or market. False

3. Depreciation is a cash charge to the income statement that relates to the periodic allocation of the cost of a tangible asset over its useful life. False

4. Natural resources, land used in ordinary business operations, truck held for resale by an automotive dealership and land improvements, such as parking lots and fences, are all examples of assets classified as property, plant or equipment. True


5. a sound internal control environment provides for the separation of responsibilities, recordation of all transactions, good personnel policies, adherence to managerial policies and a balanced marketing strategy. True

6. Under the corporate business formation, the equity section consists of partnership capital accounts including preferred stock and common stock. True

thank you

---

Thanks guys! You are the best