Using LIFO during rising prices results in a lower inventory value on the balance sheet because older, cheaper costs are recorded.

The Double Declining Balance Method results in higher depreciation expense in the early years compared to the Straight-Line Method.

The double declining balance method results in higher depreciation expenses in the early years, leading to lower net income.

Using LIFO (Last-In, First-Out) during inflation results in lower net income due to higher cost of goods sold.

The Straight-Line Method results in consistent expense recognition, leading to stable net income over the asset's useful life.

The weighted average cost method averages the cost of all inventory items, which smooths out price fluctuations over time.

The weighted average method smooths out price fluctuations by averaging the cost of all inventory items.

Recording a cash sale as an expense increases expenses and creates an imbalance in the trial balance.

Not posting the expense means total debits will be understated by $1,000, affecting the balance.

Net profit is calculated by subtracting total expenses from total revenue.

Return on equity (ROE) is calculated by dividing net income by shareholder's equity, indicating how effectively management is using a company’s assets to create profits.

The straight-line depreciation formula is (Cost - Salvage Value) / Useful Life.

COGS is calculated using the formula: Opening inventory + Purchases - Closing inventory.

The gross profit margin is calculated by subtracting the cost of goods sold from sales and then dividing by sales, indicating the percentage of revenue that exceeds the cost of goods sold.

Return on Equity (ROE) is calculated by dividing net income by shareholder's equity, indicating how effectively management is using a company’s assets to create profits.

Working capital is calculated using the formula: Current Assets - Current Liabilities.

Accumulated depreciation is a contra asset account that reduces the book value of fixed assets on the balance sheet, thus decreasing total assets.

Accrued expenses increase expenses and increase liabilities, thus impacting the trial balance.

An error in the trial balance can lead to incorrect profit calculations, affecting the accuracy of the final accounts.

An error in the trial balance may lead to incorrect profit calculation and incorrect asset valuation in the final accounts.

An error in the trial balance can lead to misstated financial statements, as the inaccuracies will carry over into the final reports.

Depreciation is an expense that reduces the net income of the partnership in the final accounts.

Depreciation decreases asset balances on the trial balance as it represents the allocation of the cost of an asset over its useful life.

Drawings reduce the owner's equity in the final accounts, as they represent withdrawals made by the owner for personal use.

Inventory valuation affects both the balance sheet (as an asset) and the income statement (as an expense).

Not properly accounting for depreciation can lead to overstated assets and net income, misrepresenting the financial position.

Not recording depreciation leads to overstated assets, understated expenses, and consequently higher net income.

Recording depreciation decreases total equity as it is an expense that reduces net income.

Revaluation of assets typically results in an increase in the capital accounts of the partners reflecting the increased value of assets.

Switching from FIFO to LIFO during inflation will typically decrease net income due to higher COGS being reported.