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  1. A

    What will be the effect on the year-end financial statements and why?

    The company accountant recorded a cash purchase of heavy equipment in the inventory account. a. Total assets will be overstated. b. Inventory will be understated. c. Net income will not be affected. d. Net cash from operations will be understated.
  2. A

    The cost is the basis for preparing financial statements because it is?

    a) a conservative value b) relevant and objectively measured, and verifiable c) an international accounting standard d) the most accurate measure of purchasing power
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