Question 1

Which of the following statements is not correct?

Accepted Answer

A)  The gross profit percentage is calculated by dividing the gross profit for the year by the net sales for the year. 
B)  The average inventory is calculated by adding the beginning inventory to the ending inventory and dividing the sum by 2. 
C)  A current ratio of 3.5 to 1 means that a firm has $3.50 in current liabilities for every $1 of current assets. 
D)  Working capital is the difference between total current assets and total current liabilities. 
A)  The gross profit percentage is calculated by dividing the gross profit for the year by the net sales for the year. 
B)  The average inventory is calculated by adding the beginning inventory to the ending inventory and dividing the sum by 2. 
C)  A current ratio of 3.5 to 1 means that a firm has $3.50 in current liabilities for every $1 of current assets. 
D)  Working capital is the difference between total current assets and total current liabilities. C

Question 2

Each reversing entry is the exact opposite of the related ____________________ entry.

Accepted Answer

adjusting

Question 3

Current assets are usually listed on a balance sheet in order of liquidity.

Accepted Answer

A) True 
 B)False  True

Question 4

The beginning capital balance shown on a statement of owner's equity is $86,000.Net income for the period is $36,000.The owner withdrew $44,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Accepted Answer

A)  $78,000. 
B)  $94,000. 
C)  $122,000. 
D)  $166,000. 
A)  $78,000. 
B)  $94,000. 
C)  $122,000. 
D)  $166,000.

Question 5

At the end of the period,the balance of the Accounts Receivable account is closed to the Income Summary account.

Accepted Answer

A) True 
 B)False

Question 6

On Mar.1,Brown's Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited an asset account for the full amount.Select the adjusting entry made on December 31,to record the amount of rent that had expired.

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 7

The statement of owner's equity is prepared before the balance sheet so that the beginning owner's equity balance is available for the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question.   Select the correct closing entry that RB Auto would make to close the owner's withdrawal account at the end of the accounting period.

Accepted Answer

A)  debit R.Holloway,Drawing $500 and credit Income Summary for $500. 
B)  debit Income Summary $500 and credit R.Holloway,Drawing for $500. 
C)  debit R.Holloway,Capital $500 and credit R.Holloway,Drawing for $500. 
D)  debit R.Holloway,Drawing $500 credit R.Holloway,Capital for $500. 
A)  debit R.Holloway,Drawing $500 and credit Income Summary for $500. 
B)  debit Income Summary $500 and credit R.Holloway,Drawing for $500. 
C)  debit R.Holloway,Capital $500 and credit R.Holloway,Drawing for $500. 
D)  debit R.Holloway,Drawing $500 credit R.Holloway,Capital for $500.

Question 9

An adjusting entry was made for accrued salaries of $600 at the end of 2013.The adjusting entry was then reversed.To record the first payroll of 2014,which totaled $1,500,Salaries Expense should be debited for ___________________.

Accepted Answer

The answer of An adjusting entry was made for accrued...

Question 10

After the ____________________ entries are posted,the Sales account will have a zero balance.

Accepted Answer

The answer of After the ____________________ entries are posted,the Sales...

Question 11

The difference between net sales and the cost of goods sold is called the ____________________ on sales.

Accepted Answer

The answer of The difference between net sales and the...

Question 12

The beginning capital balance shown on a statement of owner's equity is $100,000.Net income for the period is $50,000.The owner withdrew $25,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Accepted Answer

A)  $175,000. 
B)  $150,000. 
C)  $125,000. 
D)  $100,000. 
A)  $175,000. 
B)  $150,000. 
C)  $125,000. 
D)  $100,000.

Question 13

Cash,items that will normally be converted to cash within one year,and items that will be used up within one year are called ____________________ assets.

Accepted Answer

The answer of Cash,items that will normally be converted to...

Question 14

Which of the following is not a current asset?

Accepted Answer

A)  Accounts Receivable 
B)  Prepaid Insurance 
C)  Merchandise Inventory 
D)  Equipment 
A)  Accounts Receivable 
B)  Prepaid Insurance 
C)  Merchandise Inventory 
D)  Equipment

Question 15

The total of the operating expenses for the period is deducted from the gross profit on sales to determine the net income or net loss from operations.

Accepted Answer

A) True 
 B)False

Question 16

Each balance appearing in the ____________________ section of the worksheet is closed into the Income Summary account.

Accepted Answer

The answer of Each balance appearing in the ____________________ section...

Question 17

The adjusting entry to record depreciation should be reversed at the start of a new fiscal period to make subsequent financial record keeping easier.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is correct?

Accepted Answer

A)  The term single-step income statement is sometimes used to describe a classified income statement. 
B)  If a business is to earn a net income,the gross profit on sales must be greater than operating expenses. 
C)  Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement. 
D)  Sales less Operating Expenses equals Gross Profit. 
A)  The term single-step income statement is sometimes used to describe a classified income statement. 
B)  If a business is to earn a net income,the gross profit on sales must be greater than operating expenses. 
C)  Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement. 
D)  Sales less Operating Expenses equals Gross Profit.

Question 19

Gross profit on sales is calculated by subtracting

Accepted Answer

A)  sales returns and allowances from sales. 
B)  cost of goods sold from net sales. 
C)  ending inventory from the total merchandise available for sale. 
D)  total expenses from sales. 
A)  sales returns and allowances from sales. 
B)  cost of goods sold from net sales. 
C)  ending inventory from the total merchandise available for sale. 
D)  total expenses from sales.

Question 20

On a classified balance sheet,Accounts Payable would appear in the ____________________ section.

Accepted Answer

The answer of On a classified balance sheet,Accounts Payable would...

Exam 13: Financial Statements and Closing Procedures

Which of the following statements is not correct?

Each reversing entry is the exact opposite of the related ____________________ entry.

Current assets are usually listed on a balance sheet in order of liquidity.

The beginning capital balance shown on a statement of owner's equity is $86,000.Net income for the period is $36,000.The owner withdrew $44,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

At the end of the period,the balance of the Accounts Receivable account is closed to the Income Summary account.

On Mar.1,Brown's Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited an asset account for the full amount.Select the adjusting entry made on December 31,to record the amount of rent that had expired.

The statement of owner's equity is prepared before the balance sheet so that the beginning owner's equity balance is available for the balance sheet.

Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question. Select the correct closing entry that RB Auto would make to close the owner's withdrawal account at the end of the accounting period.

An adjusting entry was made for accrued salaries of $600 at the end of 2013.The adjusting entry was then reversed.To record the first payroll of 2014,which totaled $1,500,Salaries Expense should be debited for ___________________.

After the ____________________ entries are posted,the Sales account will have a zero balance.

The difference between net sales and the cost of goods sold is called the ____________________ on sales.

The beginning capital balance shown on a statement of owner's equity is $100,000.Net income for the period is $50,000.The owner withdrew $25,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Cash,items that will normally be converted to cash within one year,and items that will be used up within one year are called ____________________ assets.

Which of the following is not a current asset?

The total of the operating expenses for the period is deducted from the gross profit on sales to determine the net income or net loss from operations.

Each balance appearing in the ____________________ section of the worksheet is closed into the Income Summary account.

The adjusting entry to record depreciation should be reversed at the start of a new fiscal period to make subsequent financial record keeping easier.

Which of the following statements is correct?

Gross profit on sales is calculated by subtracting

On a classified balance sheet,Accounts Payable would appear in the ____________________ section.

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analyses

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

Filters