Question 1

As supplies are used, they become

Accepted Answer

A)  an asset. 
B)  a liability. 
C)  an expense. 
D)  a revenue. 
A)  an asset. 
B)  a liability. 
C)  an expense. 
D)  a revenue.

Question 2

The physical count of inventory was incorrect which overstated the ending inventory. This would cause

Accepted Answer

A)  Cost of Goods Sold to be overstated. 
B)  Cost of Goods Sold to be understated. 
C)  gross profit to be understated. 
D)  net income to be understated. 
A)  Cost of Goods Sold to be overstated. 
B)  Cost of Goods Sold to be understated. 
C)  gross profit to be understated. 
D)  net income to be understated.

Question 3

Unearned Rent is what type of account?

Accepted Answer

A)  Asset 
B)  Revenue 
C)  Liability 
D)  Expense 
A)  Asset 
B)  Revenue 
C)  Liability 
D)  Expense

Question 4

Inventory shrinkage is $100. The income statement debit and credit columns of the worksheet total $2,500 and $2,500, respectively, not including the adjustment amounts for shrinkage. The net income or loss for the period is

Accepted Answer

A)  $150 net income. 
B)  $150 net loss. 
C)  $100 net income. 
D)  $100 net loss. 
A)  $150 net income. 
B)  $150 net loss. 
C)  $100 net income. 
D)  $100 net loss.

Question 5

Mortgage Payable is an expense account.

Accepted Answer

A) True 
 B)False

Question 6

An account usually not used in an adjusting entry is

Accepted Answer

A)  Consulting Fees-Revenue. 
B)  Interest Payable. 
C)  Equipment. 
D)  Accumulated Depreciation - Equipment. 
A)  Consulting Fees-Revenue. 
B)  Interest Payable. 
C)  Equipment. 
D)  Accumulated Depreciation - Equipment.

Question 7

Calculate: (a) net sales, (b) inventory shrinkage, (c) gross profit, and (d) net income from the following:
             Sales       $1,300       Cost of Goods Sold (unadjusted)       $1,061               Sales Discount       5       Merchandise Inventory       900               Sales Returns and              Physical Inventory Count       884               Allowances       15       Operating Expenses       100

Accepted Answer

a) $1,280

Question 8

In the periodic inventory system the inventory balance is

Accepted Answer

A)  updated only at the end of the period. 
B)  updated at the beginning of the period. 
C)  continually updated throughout the year. 
D)  adjusted only every three months. 
A)  updated only at the end of the period. 
B)  updated at the beginning of the period. 
C)  continually updated throughout the year. 
D)  adjusted only every three months.

Question 9

The Inventory ledger account balance was $16,000 but the physical count at the end of period was $15,900. What adjustment is required to Cost of Goods Sold?

Accepted Answer

A)  $15,900 
B)  -$100 
C)  +$100 
D)  $0 
A)  $15,900 
B)  -$100 
C)  +$100 
D)  $0

Question 10

If gross profit exceeds expenses, the company

Accepted Answer

A)  had a net loss. 
B)  broke even. 
C)  had a net income. 
D)  Not enough information given 
A)  had a net loss. 
B)  broke even. 
C)  had a net income. 
D)  Not enough information given

Question 11

The adjustment for salaries is necessary

Accepted Answer

A)  because the employer did not have enough cash to write the paycheques. 
B)  to recognize the revenue in the period earned. 
C)  to recognize the expense in the period incurred. 
D)  None of the above answers are correct. 
A)  because the employer did not have enough cash to write the paycheques. 
B)  to recognize the revenue in the period earned. 
C)  to recognize the expense in the period incurred. 
D)  None of the above answers are correct.

Question 12

Sales would be found on the worksheet in the

Accepted Answer

A)  income statement debit column. 
B)  income statement credit column. 
C)  balance sheet debit column. 
D)  balance sheet credit column. 
A)  income statement debit column. 
B)  income statement credit column. 
C)  balance sheet debit column. 
D)  balance sheet credit column.

Question 13

The perpetual inventory method is

Accepted Answer

A)  used by companies with small amounts of inventory. 
B)  used by companies with high amounts of inventory. 
C)  not used by many companies today. 
D)  does not ever require a physical inventory. 
A)  used by companies with small amounts of inventory. 
B)  used by companies with high amounts of inventory. 
C)  not used by many companies today. 
D)  does not ever require a physical inventory.

Question 14

Debra paid $960 on a one-year insurance policy on March 1. The entry included a debit to Prepaid Insurance. The adjusting entry on December 31 would include a

Accepted Answer

A)  debit to Prepaid Insurance for $800; and a credit to Cash for $800. 
B)  debit to Insurance Expense for $800; and a credit to Prepaid Insurance for $800. 
C)  debit to Insurance Expense for $960; and credit to Prepaid Insurance for $960. 
D)  debit to Cash for $960; and credit to Prepaid Insurance for $960. 
A)  debit to Prepaid Insurance for $800; and a credit to Cash for $800. 
B)  debit to Insurance Expense for $800; and a credit to Prepaid Insurance for $800. 
C)  debit to Insurance Expense for $960; and credit to Prepaid Insurance for $960. 
D)  debit to Cash for $960; and credit to Prepaid Insurance for $960.

Question 15

The adjustment for supplies used would be to

Accepted Answer

A)  debit Supplies Expense; credit Supplies. 
B)  debit Supplies; credit Cash. 
C)  debit Supplies; credit Supplies Expense. 
D)  debit Supplies; credit Accounts Payable. 
A)  debit Supplies Expense; credit Supplies. 
B)  debit Supplies; credit Cash. 
C)  debit Supplies; credit Supplies Expense. 
D)  debit Supplies; credit Accounts Payable.

Question 16

Inventory Shrinkage results because of

Accepted Answer

A)  theft. 
B)  breakage. 
C)  errors in recording transactions. 
D)  All of the above are correct. 
A)  theft. 
B)  breakage. 
C)  errors in recording transactions. 
D)  All of the above are correct.

Question 17

A perpetual inventory system is an inventory system that keeps continual track of inventory. It is used by companies with a high unit cost and a low volume.

Accepted Answer

A) True 
 B)False

Question 18

As Unearned Rent is earned, it becomes

Accepted Answer

A)  an asset. 
B)  a revenue. 
C)  a liability. 
D)  an expense. 
A)  an asset. 
B)  a revenue. 
C)  a liability. 
D)  an expense.

Question 19

Assuming a periodic system, the beginning inventory

Accepted Answer

A)  in the current period is a periodic inventory. 
B)  in the current period is a perpetual inventory. 
C)  in the current period is the beginning inventory last period. 
D)  remains unchanged during the accounting period. 
A)  in the current period is a periodic inventory. 
B)  in the current period is a perpetual inventory. 
C)  in the current period is the beginning inventory last period. 
D)  remains unchanged during the accounting period.

Question 20

Mortgage Payable is what type of account?

Accepted Answer

A)  Asset 
B)  Liability 
C)  Expense 
D)  Capital 
A)  Asset 
B)  Liability 
C)  Expense 
D)  Capital

As supplies are used, they become

The physical count of inventory was incorrect which overstated the ending inventory. This would cause

Unearned Rent is what type of account?

Inventory shrinkage is $100. The income statement debit and credit columns of the worksheet total $2,500 and $2,500, respectively, not including the adjustment amounts for shrinkage. The net income or loss for the period is

Mortgage Payable is an expense account.

An account usually not used in an adjusting entry is

Calculate: (a) net sales, (b) inventory shrinkage, (c) gross profit, and (d) net income from the following:

Sales $1,300 Cost of Goods Sold (unadjusted) $1,061

Sales Discount 5 Merchandise Inventory 900

Sales Returns and Physical Inventory Count 884

Allowances 15 Operating Expenses 100

In the periodic inventory system the inventory balance is

The Inventory ledger account balance was $16,000 but the physical count at the end of period was $15,900. What adjustment is required to Cost of Goods Sold?

If gross profit exceeds expenses, the company

The adjustment for salaries is necessary

Sales would be found on the worksheet in the

The perpetual inventory method is

Debra paid $960 on a one-year insurance policy on March 1. The entry included a debit to Prepaid Insurance. The adjusting entry on December 31 would include a

The adjustment for supplies used would be to

Inventory Shrinkage results because of

A perpetual inventory system is an inventory system that keeps continual track of inventory. It is used by companies with a high unit cost and a low volume.

As Unearned Rent is earned, it becomes

Assuming a periodic system, the beginning inventory

Mortgage Payable is what type of account?

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

Completion of the Accounting Cycle for a Merchandising Company

Filters

Sales	$1,300	Cost of Goods Sold (unadjusted)	$1,061
Sales Discount	5	Merchandise Inventory	900
Sales Returns and		Physical Inventory Count	884
Allowances	15	Operating Expenses	100

Exam 12: Preparing a Worksheet for a Merchandising Company

As supplies are used, they become

The physical count of inventory was incorrect which overstated the ending inventory. This would cause

Unearned Rent is what type of account?

Inventory shrinkage is $100. The income statement debit and credit columns of the worksheet total $2,500 and $2,500, respectively, not including the adjustment amounts for shrinkage. The net income or loss for the period is

Mortgage Payable is an expense account.

An account usually not used in an adjusting entry is

Calculate: (a) net sales, (b) inventory shrinkage, (c) gross profit, and (d) net income from the following: Sales $1,300 Cost of Goods Sold (unadjusted) $1,061 Sales Discount 5 Merchandise Inventory 900 Sales Returns and Physical Inventory Count 884 Allowances 15 Operating Expenses 100

In the periodic inventory system the inventory balance is

The Inventory ledger account balance was $16,000 but the physical count at the end of period was $15,900. What adjustment is required to Cost of Goods Sold?

If gross profit exceeds expenses, the company

The adjustment for salaries is necessary

Sales would be found on the worksheet in the

The perpetual inventory method is

Debra paid $960 on a one-year insurance policy on March 1. The entry included a debit to Prepaid Insurance. The adjusting entry on December 31 would include a

The adjustment for supplies used would be to

Inventory Shrinkage results because of

A perpetual inventory system is an inventory system that keeps continual track of inventory. It is used by companies with a high unit cost and a low volume.

As Unearned Rent is earned, it becomes

Assuming a periodic system, the beginning inventory

Mortgage Payable is what type of account?

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

Completion of the Accounting Cycle for a Merchandising Company

Filters

Calculate: (a) net sales, (b) inventory shrinkage, (c) gross profit, and (d) net income from the following:

Sales $1,300 Cost of Goods Sold (unadjusted) $1,061

Sales Discount 5 Merchandise Inventory 900

Sales Returns and Physical Inventory Count 884

Allowances 15 Operating Expenses 100