Question 1

After the closing process, the temporary accounts are set back to zero.

Accepted Answer

A) True 
 B)False

Question 2

The entry to close the Withdrawals account to Capital was omitted. This error would cause

Accepted Answer

A)  the Capital account to be understated. 
B)  net income to be overstated. 
C)  net income to be understated. 
D)  the Capital account to be overstated. 
A)  the Capital account to be understated. 
B)  net income to be overstated. 
C)  net income to be understated. 
D)  the Capital account to be overstated.

Question 3

Identify the category(s) of each of the accounts below.
Current Asset
Plant and Equipment
Current Liabilities
Long-Term Liabilities
Item Category
0. Cash Current Asset ________
a. Accts. Receivable ________ ________
b. Accts. Payable ________ ________
c. Mortgage Payable ________ ________
d. Office Equipment ________ ________
e. Prepaid Insurance ________ ________

Accepted Answer

Item Category
a. Current Asset

Question 4

Which of the following is NOT an operating expense?

Accepted Answer

A)  Payroll Tax Expense 
B)  Interest Expense 
C)  Postage Expense 
D)  Salaries Expense 
A)  Payroll Tax Expense 
B)  Interest Expense 
C)  Postage Expense 
D)  Salaries Expense

Question 5

The correct worksheet columns to use for preparing the income statement are the

Accepted Answer

A)  adjustments columns. 
B)  income statement columns. 
C)  adjusted trial balance columns. 
D)  trial balance columns. 
A)  adjustments columns. 
B)  income statement columns. 
C)  adjusted trial balance columns. 
D)  trial balance columns.

Question 6

The average time it takes to buy and sell merchandise and collect Accounts Receivable is the normal operating cycle for a business.

Accepted Answer

A) True 
 B)False

Question 7

Selling expenses include

Accepted Answer

A)  Advertising Expense. 
B)  Rent Expense. 
C)  Office Supplies Expense. 
D)  All of the above are correct. 
A)  Advertising Expense. 
B)  Rent Expense. 
C)  Office Supplies Expense. 
D)  All of the above are correct.

Question 8

Gross profit minus cost of goods sold equals net sales.

Accepted Answer

A) True 
 B)False

Question 9

The information to prepare the Statement of Owner's Equity comes from the

Accepted Answer

A)  income statement columns on the worksheet. 
B)  adjustments columns on the worksheet. 
C)  balance sheet columns on the worksheet. 
D)  general ledger. 
A)  income statement columns on the worksheet. 
B)  adjustments columns on the worksheet. 
C)  balance sheet columns on the worksheet. 
D)  general ledger.

Question 10

Merchandise purchased for resale under the perpetual inventory method is added to

Accepted Answer

A)  Merchandise Inventory. 
B)  Sales. 
C)  Sales Discounts. 
D)  Cost of Goods Sold. 
A)  Merchandise Inventory. 
B)  Sales. 
C)  Sales Discounts. 
D)  Cost of Goods Sold.

Question 11

In what category in a classified balance sheet is Accounts Receivable found?

Accepted Answer

A)  Plant and Equipment 
B)  Current Liabilities 
C)  Current Assets 
D)  Owner's Equity 
A)  Plant and Equipment 
B)  Current Liabilities 
C)  Current Assets 
D)  Owner's Equity

Question 12

The reversing entry for Salaries is

Accepted Answer

A)  debit Salaries Expense; credit Salaries Payable. 
B)  debit Salaries Payable; credit Income Summary. 
C)  debit Salaries Payable; credit Salaries Expense. 
D)  debit Salaries Expense; credit Cash. 
A)  debit Salaries Expense; credit Salaries Payable. 
B)  debit Salaries Payable; credit Income Summary. 
C)  debit Salaries Payable; credit Salaries Expense. 
D)  debit Salaries Expense; credit Cash.

Question 13

The ending merchandise inventory was understated. This error would cause

Accepted Answer

A)  assets to be understated. 
B)  assets to be overstated. 
C)  net income to be overstated. 
D)  None of these are correct. 
A)  assets to be understated. 
B)  assets to be overstated. 
C)  net income to be overstated. 
D)  None of these are correct.

Question 14

A classified balance sheet includes all of the following EXCEPT

Accepted Answer

A)  current assets. 
B)  plant and equipment. 
C)  revenues. 
D)  current liabilities. 
A)  current assets. 
B)  plant and equipment. 
C)  revenues. 
D)  current liabilities.

Question 15

Which amount is not directly found on the worksheet?

Accepted Answer

A)  Cost of Goods Sold 
B)  Inventory 
C)  Gross Profit 
D)  Sales 
A)  Cost of Goods Sold 
B)  Inventory 
C)  Gross Profit 
D)  Sales

Question 16

Store Equipment would normally be classified as a current asset.

Accepted Answer

A) True 
 B)False

Question 17

The entry to close the Cost of Goods Sold account will include which of the following?

Accepted Answer

A)  Debit to Cost of Goods Sold 
B)  Credit to Income Summary 
C)  Debit to Income Summary 
D)  Debit to Capital 
A)  Debit to Cost of Goods Sold 
B)  Credit to Income Summary 
C)  Debit to Income Summary 
D)  Debit to Capital

Question 18

After the closing entries have been posted

Accepted Answer

A)  the temporary accounts are zeroed out. 
B)  the Capital account includes the current net profit or loss. 
C)  the post-closing trial balance is prepared. 
D)  All of these answers are correct. 
A)  the temporary accounts are zeroed out. 
B)  the Capital account includes the current net profit or loss. 
C)  the post-closing trial balance is prepared. 
D)  All of these answers are correct.

Question 19

Net Sales + Sales Discounts + Sales Returns and Allowances equals

Accepted Answer

A)  Net Loss. 
B)  Gross Sales. 
C)  Net Income from Operations. 
D)  Gross Profit. 
A)  Net Loss. 
B)  Gross Sales. 
C)  Net Income from Operations. 
D)  Gross Profit.

Question 20

The entry to close the Income Summary to Capital was omitted, there was a net income. This error would cause

Accepted Answer

A)  the Capital account to be understated. 
B)  net income to be overstated. 
C)  net income to be understated. 
D)  the Capital account to be overstated. 
A)  the Capital account to be understated. 
B)  net income to be overstated. 
C)  net income to be understated. 
D)  the Capital account to be overstated.

After the closing process, the temporary accounts are set back to zero.

The entry to close the Withdrawals account to Capital was omitted. This error would cause

Identify the category(s) of each of the accounts below. Current Asset Plant and Equipment Current Liabilities Long-Term Liabilities Item Category 0. Cash Current Asset a. Accts. Receivable b. Accts. Payable c. Mortgage Payable d. Office Equipment e. Prepaid Insurance

Which of the following is NOT an operating expense?

The correct worksheet columns to use for preparing the income statement are the

The average time it takes to buy and sell merchandise and collect Accounts Receivable is the normal operating cycle for a business.

Selling expenses include

Gross profit minus cost of goods sold equals net sales.

The information to prepare the Statement of Owner's Equity comes from the

Merchandise purchased for resale under the perpetual inventory method is added to

In what category in a classified balance sheet is Accounts Receivable found?

The reversing entry for Salaries is

The ending merchandise inventory was understated. This error would cause

A classified balance sheet includes all of the following EXCEPT

Which amount is not directly found on the worksheet?

Store Equipment would normally be classified as a current asset.

The entry to close the Cost of Goods Sold account will include which of the following?

After the closing entries have been posted

Net Sales + Sales Discounts + Sales Returns and Allowances equals

The entry to close the Income Summary to Capital was omitted, there was a net income. This error would cause

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

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Exam 13: Completion of the Accounting Cycle for a Merchandising Company

After the closing process, the temporary accounts are set back to zero.

The entry to close the Withdrawals account to Capital was omitted. This error would cause

Which of the following is NOT an operating expense?

The correct worksheet columns to use for preparing the income statement are the

The average time it takes to buy and sell merchandise and collect Accounts Receivable is the normal operating cycle for a business.

Selling expenses include

Gross profit minus cost of goods sold equals net sales.

The information to prepare the Statement of Owner's Equity comes from the

Merchandise purchased for resale under the perpetual inventory method is added to

In what category in a classified balance sheet is Accounts Receivable found?

The reversing entry for Salaries is

The ending merchandise inventory was understated. This error would cause

A classified balance sheet includes all of the following EXCEPT

Which amount is not directly found on the worksheet?

Store Equipment would normally be classified as a current asset.

The entry to close the Cost of Goods Sold account will include which of the following?

After the closing entries have been posted

Net Sales + Sales Discounts + Sales Returns and Allowances equals

The entry to close the Income Summary to Capital was omitted, there was a net income. This error would cause

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Filters