Question 1

Cost of goods available for sale is equal to beginning inventory + Operating Expense.

Accepted Answer

A) True 
 B)False

Question 2

Plant and Equipment is usually listed:

Accepted Answer

A) in alphabetical order. 
B) in order of liquidity. 
C) by how long they will last. 
D) in order of purchase. 
A) in alphabetical order. 
B) in order of liquidity. 
C) by how long they will last. 
D) in order of purchase.

Question 3

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 4

What is the name of the revenue account used by merchandise companies?

Accepted Answer

A) Sales 
B) Interest Income 
C) Merchandise Inventory 
D) Capital 
A) Sales 
B) Interest Income 
C) Merchandise Inventory 
D) Capital

Question 5

Discuss the purpose of a classified balance sheet.Include a description of the major balance sheet classifications including: current assets,plant and equipment,current liabilities,and long-term liabilities.

Accepted Answer

A classified balance sheet provides more

Question 6

Which of the following is an operating expense?

Accepted Answer

A) Interest Expense 
B) Interest Revenue 
C) Salaries Expense 
D) Prepaid Insurance Expense 
A) Interest Expense 
B) Interest Revenue 
C) Salaries Expense 
D) Prepaid Insurance Expense

Question 7

Merchandise purchased for resale under the periodic inventory method is added to:

Accepted Answer

A) Merchandise Inventory. 
B) Supplies. 
C) Purchases. 
D) Inventory Expense. 
A) Merchandise Inventory. 
B) Supplies. 
C) Purchases. 
D) Inventory Expense.

Question 8

Cost of Goods Sold includes:

Accepted Answer

A) Freight-in. 
B) Freight-out. 
C) Supplies Expense. 
D) Net Sales. 
A) Freight-in. 
B) Freight-out. 
C) Supplies Expense. 
D) Net Sales.

Question 9

Reversing entries are recorded on the third day of the new accounting period.

Accepted Answer

A) True 
 B)False

Question 10

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column } 3 & \text { Column } 4 \
\hline \text { Purchases } & & & & \
\text { Returns \& } & & & & \
\text { Allowances } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 11

The income statement is prepared from the:

Accepted Answer

A) Post-Closing Trial Balance. 
B) worksheet. 
C) general journal. 
D) statement of owner's equity. 
A) Post-Closing Trial Balance. 
B) worksheet. 
C) general journal. 
D) statement of owner's equity.

Question 12

The following accounts are on the Balance Sheet section of Scents Galore worksheet for the date November 30,201X.
Additional information: Withdrawals for the period are $4,and Net Income is $12.
 $$\begin{array} { | l | c | c | } 
\hline \text { Account } & \text { Balance Sheet Debit } & \text { Balance Sheet Credit } \
\hline \text { Cash } & 6 & \
\hline \text { Accounts Receivable } & 15 & \
\hline \text { Merchandise Inventory } & 14 & \
\hline \text { Store Equipment } & 30 &  \
\hline \text { Accumulated Depreciation - Store } & & \
\text { Equipment } & & 6 \
\hline \text { Accounts Payable } & & 19 \
\hline \text { Mortgage Payable } & & 24\
\hline \text { Scents Galore, Capital } & &8 \
\hline
\end{array}$$

Accepted Answer

The answer of The following accounts are on the Balance...

Question 13

Selling expenses include:

Accepted Answer

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

Question 14

In closing entries,the Income Summary account is closed to the Capital account before Withdrawals.

Accepted Answer

A) True 
 B)False

Question 15

Adjusting entries from the worksheet:

Accepted Answer

A) are journalized and posted to the ledger. 
B) are posted directly to the ledger. 
C) are closed to the Income Summary account. 
D) affect only income statement accounts. 
A) are journalized and posted to the ledger. 
B) are posted directly to the ledger. 
C) are closed to the Income Summary account. 
D) affect only income statement accounts.

Question 16

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

Question 17

Reversing entries occur at the beginning of the accounting period and:

Accepted Answer

A) help to reduce potential errors. 
B) simplify the bookkeeping associated with accruals from the prior period. 
C) reverse the adjusting entries. 
D) All of the above are correct. 
A) help to reduce potential errors. 
B) simplify the bookkeeping associated with accruals from the prior period. 
C) reverse the adjusting entries. 
D) All of the above are correct.

Question 18

The post-closing trial balance is prepared from:

Accepted Answer

A) the adjustments column on the worksheet. 
B) the balance sheet columns on the worksheet. 
C) the trial balance columns on the worksheet. 
D) the general ledger. 
A) the adjustments column on the worksheet. 
B) the balance sheet columns on the worksheet. 
C) the trial balance columns on the worksheet. 
D) the general ledger.

Question 19

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column 4 } \
\hline \text { Purchases } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 20

If Net Sales is $10,000,Cost of Goods Sold is $5,000,Gross Profit is $5,000 and Operating Expenses are $1,000,what is the Net Income from Operations?

Accepted Answer

A) $2,000 
B) $4,000 
C) $1,000 
D) $3,000 
A) $2,000 
B) $4,000 
C) $1,000 
D) $3,000

Exam 12: Completion of the Accounting Cycle for a Merchandise Company

Cost of goods available for sale is equal to beginning inventory + Operating Expense.

Plant and Equipment is usually listed:

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

What is the name of the revenue account used by merchandise companies?

Discuss the purpose of a classified balance sheet.Include a description of the major balance sheet classifications including: current assets,plant and equipment,current liabilities,and long-term liabilities.

Which of the following is an operating expense?

Merchandise purchased for resale under the periodic inventory method is added to:

Cost of Goods Sold includes:

Reversing entries are recorded on the third day of the new accounting period.

The income statement is prepared from the:

Selling expenses include:

In closing entries,the Income Summary account is closed to the Capital account before Withdrawals.

Adjusting entries from the worksheet:

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

Reversing entries occur at the beginning of the accounting period and:

The post-closing trial balance is prepared from:

If Net Sales is $10,000,Cost of Goods Sold is $5,000,Gross Profit is $5,000 and Operating Expenses are $1,000,what is the Net Income from Operations?

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters