Question 1

The Prepaid Asset and Cost of Goods Sold accounts are combined to come up with the balance sheet inventory amount.

Accepted Answer

A) True 
 B)False

Question 2

Indicate the normal balance of each of the following accounts:
a) Unearned Rent Revenue
b) Merchandise Inventory
c) Cost of Goods Sold
d) Sales Discount
e) Unearned Revenue

Accepted Answer

a) Credit

Question 3

When the adjustment for Unearned Rent is made,

Accepted Answer

A)  liabilities decrease. 
B)  revenue increases. 
C)  assets decrease. 
D)  Both A and B are correct. 
A)  liabilities decrease. 
B)  revenue increases. 
C)  assets decrease. 
D)  Both A and B are correct.

Question 4

The balance sheet columns on the worksheet prepared for Boston Foods had subtotals as follows: debit column, $11,000, and credit column, $10,400. This information indicates that

Accepted Answer

A)  the company incurred a net income of $600. 
B)  the company incurred a net loss of $600. 
C)  an error was made when preparing the adjustments in the worksheet. 
D)  a mathematical error was made in the worksheet. 
A)  the company incurred a net income of $600. 
B)  the company incurred a net loss of $600. 
C)  an error was made when preparing the adjustments in the worksheet. 
D)  a mathematical error was made in the worksheet.

Question 5

Depreciation on equipment was recorded twice this period. This would cause

Accepted Answer

A)  expenses to be overstated and total assets to be overstated 
B)  expenses to be overstated and total assets to be understated. 
C)  expenses to be understated and total assets to be overstated. 
D)  expenses to be understated and total assets to be understated. 
A)  expenses to be overstated and total assets to be overstated 
B)  expenses to be overstated and total assets to be understated. 
C)  expenses to be understated and total assets to be overstated. 
D)  expenses to be understated and total assets to be understated.

Question 6

Sales Discount is used when calculating Inventory.

Accepted Answer

A) True 
 B)False

Question 7

Since adjustments are listed on the worksheet, there is no need to record the entries in the general journal.

Accepted Answer

A) True 
 B)False

Question 8

Adjustments are journalized before recording them in the worksheet.

Accepted Answer

A) True 
 B)False

Question 9

The adjustment for accrued wages was not done; this would cause

Accepted Answer

A)  liabilities to be overstated. 
B)  liabilities to be understated. 
C)  expenses to be overstated. 
D)  net income to be understated. 
A)  liabilities to be overstated. 
B)  liabilities to be understated. 
C)  expenses to be overstated. 
D)  net income to be understated.

Question 10

An adjustment to Prepaid Insurance would not normally be made until the end of two years.

Accepted Answer

A) True 
 B)False

Question 11

When the adjustment is made for depreciation, both the Depreciation Expense account and Accumulated Depreciation account are increased.

Accepted Answer

A) True 
 B)False

Question 12

Joe received $4,000 in advance for renting part of his building for 4 months. What is the entry to record the adjustment after one month has passed?

Accepted Answer

A)  Debit Cash $1,000; credit Rental Income $1,000 
B)  Debit Cash $4,000; credit Rental Income $4,000 
C)  Debit Unearned Rent $1,000, credit Rental Income $1,000 
D)  Debit Unearned Rent $4,000, credit Rental Income $4,000 
A)  Debit Cash $1,000; credit Rental Income $1,000 
B)  Debit Cash $4,000; credit Rental Income $4,000 
C)  Debit Unearned Rent $1,000, credit Rental Income $1,000 
D)  Debit Unearned Rent $4,000, credit Rental Income $4,000

Question 13

As the Unearned Rent is earned,

Accepted Answer

A)  the liability account is decreased and the revenue account is increased. 
B)  the liability account is increased and the revenue account is decreased. 
C)  the liability account is decreased and the revenue account is not affected. 
D)  the liability account is not affected but the revenue account is decreased. 
A)  the liability account is decreased and the revenue account is increased. 
B)  the liability account is increased and the revenue account is decreased. 
C)  the liability account is decreased and the revenue account is not affected. 
D)  the liability account is not affected but the revenue account is decreased.

Question 14

Camping is Fun has a Merchandise Inventory account balance of $2,000 and an unadjusted Cost of Goods Sold of $2,200. Calculate the cost of goods sold under the following different situations:
a) Physical count shows $2,000 of Merchandise Inventory on hand.
b) Physical count shows $2,250 of Merchandise Inventory on hand.
c) Physical count shows $1,980 of Merchandise Inventory on hand.

Accepted Answer

a) $2,200

Question 15

Calculate (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following:
$$\begin{array} { l r l r } 
\text { Sales } & \$ 2,200 & \text { Merchandise Inventory } & \$ 65 \
\text { Sales Discount } & 50 & \text { Cost of Goods Sold } & 1,320 \
\text { Sales Returns and Allowances } & 25 & \text { Operating Expenses } & 360
\end{array}$$

Accepted Answer

Sales $2,200
Deduct:
Sales Dis

Question 16

The category Other Income can be used to report rental income.

Accepted Answer

A) True 
 B)False

Question 17

Prime Realty paid $1,800 rent on a building in advance for two years on May 1. The amount that should be recorded as rent expense as of December 31 is

Accepted Answer

A)  $600. 
B)  $1,800. 
C)  $900. 
D)  $525. 
A)  $600. 
B)  $1,800. 
C)  $900. 
D)  $525.

Question 18

On December 1, Video Center received $2,400 for two years' rent in advance from Gaffey Company. The December 31 adjusting entry that Video Center should make is to

Accepted Answer

A)  debit Rental Income; credit Unearned Rent $1,200. 
B)  debit Cash; credit Rental Income $1,200. 
C)  debit Unearned Rent; credit Rental Income $100. 
D)  debit Unearned Rent; credit Rent Expense $100. 
A)  debit Rental Income; credit Unearned Rent $1,200. 
B)  debit Cash; credit Rental Income $1,200. 
C)  debit Unearned Rent; credit Rental Income $100. 
D)  debit Unearned Rent; credit Rent Expense $100.

Question 19

The amount of supplies used causes a decrease in Supplies and an increase in expense.

Accepted Answer

A) True 
 B)False

Question 20

The financial statement on which Rental Income would appear is the

Accepted Answer

A)  income statement. 
B)  owner's equity statement. 
C)  balance sheet. 
D)  operations statement. 
A)  income statement. 
B)  owner's equity statement. 
C)  balance sheet. 
D)  operations statement.

The Prepaid Asset and Cost of Goods Sold accounts are combined to come up with the balance sheet inventory amount.

Indicate the normal balance of each of the following accounts: a) Unearned Rent Revenue b) Merchandise Inventory c) Cost of Goods Sold d) Sales Discount e) Unearned Revenue

When the adjustment for Unearned Rent is made,

The balance sheet columns on the worksheet prepared for Boston Foods had subtotals as follows: debit column, $11,000, and credit column, $10,400. This information indicates that

Depreciation on equipment was recorded twice this period. This would cause

Sales Discount is used when calculating Inventory.

Since adjustments are listed on the worksheet, there is no need to record the entries in the general journal.

Adjustments are journalized before recording them in the worksheet.

The adjustment for accrued wages was not done; this would cause

An adjustment to Prepaid Insurance would not normally be made until the end of two years.

When the adjustment is made for depreciation, both the Depreciation Expense account and Accumulated Depreciation account are increased.

Joe received $4,000 in advance for renting part of his building for 4 months. What is the entry to record the adjustment after one month has passed?

As the Unearned Rent is earned,

Calculate (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following: Sales \ 2,200 Merchandise Inventory \ 65 Sales Discount 50 Cost of Goods Sold 1,320 Sales Returns and Allowances 25 Operating Expenses 360

The category Other Income can be used to report rental income.

Prime Realty paid $1,800 rent on a building in advance for two years on May 1. The amount that should be recorded as rent expense as of December 31 is

On December 1, Video Center received $2,400 for two years' rent in advance from Gaffey Company. The December 31 adjusting entry that Video Center should make is to

The amount of supplies used causes a decrease in Supplies and an increase in expense.

The financial statement on which Rental Income would appear is the

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

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Exam 12: Preparing a Worksheet for a Merchandising Company

The Prepaid Asset and Cost of Goods Sold accounts are combined to come up with the balance sheet inventory amount.

Indicate the normal balance of each of the following accounts: a) Unearned Rent Revenue b) Merchandise Inventory c) Cost of Goods Sold d) Sales Discount e) Unearned Revenue

When the adjustment for Unearned Rent is made,

The balance sheet columns on the worksheet prepared for Boston Foods had subtotals as follows: debit column, $11,000, and credit column, $10,400. This information indicates that

Depreciation on equipment was recorded twice this period. This would cause

Sales Discount is used when calculating Inventory.

Since adjustments are listed on the worksheet, there is no need to record the entries in the general journal.

Adjustments are journalized before recording them in the worksheet.

The adjustment for accrued wages was not done; this would cause

An adjustment to Prepaid Insurance would not normally be made until the end of two years.

When the adjustment is made for depreciation, both the Depreciation Expense account and Accumulated Depreciation account are increased.

Joe received $4,000 in advance for renting part of his building for 4 months. What is the entry to record the adjustment after one month has passed?

As the Unearned Rent is earned,

Calculate (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following: Sales \ 2,200 Merchandise Inventory \ 65 Sales Discount 50 Cost of Goods Sold 1,320 Sales Returns and Allowances 25 Operating Expenses 360

The category Other Income can be used to report rental income.

Prime Realty paid $1,800 rent on a building in advance for two years on May 1. The amount that should be recorded as rent expense as of December 31 is

On December 1, Video Center received $2,400 for two years' rent in advance from Gaffey Company. The December 31 adjusting entry that Video Center should make is to

The amount of supplies used causes a decrease in Supplies and an increase in expense.

The financial statement on which Rental Income would appear is the

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