5. (True or False) Under the retail inventory method, the retail value of ending inventory is determined by counting the ending inventory, referring to invoices to determine that inventory’s cost, and multiplying the cost amount by the cost to retail percentage.
Question
5. (True or False)Under the retail inventory method, the retail value of ending inventory is determined by
counting the ending inventory, referring to invoices to determine that inventory’s cost, and multiplying the cost amount by the cost to retail percentage.
6. (Multiple Choice)
On March 1, 20X3, Jimenez purchased a one-year insurance policy for $2,400. On that date, Jimenez debited Prepaid Insurance for $2,400. If Jimenez desires to prepare financial statements at the end of March, the adjusting journal entry would include a:
A. debit to Insurance Expense for $2,400. B. debit to Insurance Expense for $200. C. credit to Insurance Expense for $2,200. D. credit to Prepaid Insurance for $2,200. E. None of these.
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