Question 1

Which of the following serves as an end-of-period accuracy check?

Accepted Answer

A)  statement of owner's equity 
B)  income statement 
C)  balance sheet 
D)  post-closing trial balance 
A)  statement of owner's equity 
B)  income statement 
C)  balance sheet 
D)  post-closing trial balance

Question 2

After the temporary owner's equity and drawing accounts are transferred to the permanent owner's equity account, which of the following accounts will have a balance?

Accepted Answer

A)  Expenses 
B)  Revenues 
C)  Owner's Capital 
D)  Income Summary 
A)  Expenses 
B)  Revenues 
C)  Owner's Capital 
D)  Income Summary

Question 3

Match the terms with the definitions.
-The number of days in the year divided by the inventory turnover.

Accepted Answer

A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity 
A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity

Question 4

Match the terms with the definitions.
-Assets that are expected to be used for more than one year in the operation of a business.

Accepted Answer

A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity 
A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity

Question 5

Match the terms with the definitions.
-Net income divided by average owner's equity.

Accepted Answer

A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities 
A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities

Question 6

Assets that are used in the operation of a business are called temporary investments.

Accepted Answer

A) True 
 B)False

Question 7

Net sales less cost of goods sold is called gross profit.

Accepted Answer

A) True 
 B)False

Question 8

Match the terms with the definitions.
-A written agreement specifying that if the borrower does not repay a debt, the lender has the right to take over specific property to satisfy the debt.

Accepted Answer

A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities 
A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities

Question 9

Current liabilities are those obligations that are due within one year or the normal operating cycle of the business, whichever is longer, and which will require use of current assets.

Accepted Answer

A) True 
 B)False

Question 10

Closing entries are made in the

Accepted Answer

A)  sales journal. 
B)  purchases journal. 
C)  general journal. 
D)  cash receipts journal. 
A)  sales journal. 
B)  purchases journal. 
C)  general journal. 
D)  cash receipts journal.

Question 11

Match the terms with the definitions.
-Cost of plant and equipment less the accumulated depreciation amounts.

Accepted Answer

A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity 
A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity

Question 12

Entries required at the end of an accounting period to bring certain account balances up-to-date are known as adjusting entries.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following accounts is used only at the close of the accounting period to adjust the merchandise inventory account and summarize the temporary owner's equity accounts?

Accepted Answer

A)  Owner's Capital 
B)  Income Summary 
C)  Cost of Goods Sold 
D)  Sales 
A)  Owner's Capital 
B)  Income Summary 
C)  Cost of Goods Sold 
D)  Sales

Question 14

Match the terms with the definitions.
-The number of times the accounts receivable turned over, or were collected, during the accounting period.

Accepted Answer

A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities 
A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities

Question 15

In a multiple-step income statement, operating expenses are subtracted from gross profit to compute

Accepted Answer

A)  income from operations. 
B)  net income. 
C)  other income. 
D)  net loss. 
A)  income from operations. 
B)  net income. 
C)  other income. 
D)  net loss.

Question 16

The Income Statement and Balance Sheet columns below are from the work sheet of a merchandising firm, J. D. Enterprise, for the year ended December 31, 20--.
​
Required:
Prepare the closing entries for the merchandising firm.

Accepted Answer

The answer of The Income Statement and Balance Sheet columns...

Question 17

Match the terms with the definitions.
-A trial balance taken after the temporary owner's equity accounts have been closed.

Accepted Answer

A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities 
A) accounts receivable turnover 
B) average collection period 
C) reversing entry 
D) return on owner's equity 
E) current assets
F)current liabilities
G)current ratio
H)post-closing trial balance
I)Mortgage Payable
J)income from operations
K)interstatement analysis
L)mortgage
M)long-term liabilities

Question 18

A formal statement of the results of the operation of a business during an accounting period is called a(n)

Accepted Answer

A)  statement of owner's equity. 
B)  balance sheet. 
C)  statement of financial position. 
D)  income statement. 
A)  statement of owner's equity. 
B)  balance sheet. 
C)  statement of financial position. 
D)  income statement.

Question 19

The work sheet for Babson's Seafood, a business owned by B. B. Babson, is provided. Year-end adjustments have been made and all required entries journalized and posted to the ledger accounts. From the work sheet, prepare a multiple-step income statement, a statement of owners' equity (assuming no additional investments), and a classified balance sheet. The current year's portion of the mortgage payable is $6,000.

Accepted Answer

The answer of The work sheet for Babson's Seafood, a...

Question 20

Match the terms with the definitions.
-Those expenses associated with administrative or office operating expenses.

Accepted Answer

A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity 
A) selling expenses 
B) quick assets 
C) average days to sell inventory 
D) book value 
E) property, plant, and equipment
F)operating cycle
G)quick ratio
H)general expenses
I)gross profit
J)net sales
K)multiple-step income statement
L)inventory turnover
M)liquidity

Exam 15: Financial Statements and Year-End Accounting for a Merchandising Business

Which of the following serves as an end-of-period accuracy check?

After the temporary owner's equity and drawing accounts are transferred to the permanent owner's equity account, which of the following accounts will have a balance?

Match the terms with the definitions. -The number of days in the year divided by the inventory turnover.

Match the terms with the definitions. -Assets that are expected to be used for more than one year in the operation of a business.

Match the terms with the definitions. -Net income divided by average owner's equity.

Assets that are used in the operation of a business are called temporary investments.

Net sales less cost of goods sold is called gross profit.

Match the terms with the definitions. -A written agreement specifying that if the borrower does not repay a debt, the lender has the right to take over specific property to satisfy the debt.

Current liabilities are those obligations that are due within one year or the normal operating cycle of the business, whichever is longer, and which will require use of current assets.

Closing entries are made in the

Match the terms with the definitions. -Cost of plant and equipment less the accumulated depreciation amounts.

Entries required at the end of an accounting period to bring certain account balances up-to-date are known as adjusting entries.

Which of the following accounts is used only at the close of the accounting period to adjust the merchandise inventory account and summarize the temporary owner's equity accounts?

Match the terms with the definitions. -The number of times the accounts receivable turned over, or were collected, during the accounting period.

In a multiple-step income statement, operating expenses are subtracted from gross profit to compute

The Income Statement and Balance Sheet columns below are from the work sheet of a merchandising firm, J. D. Enterprise, for the year ended December 31, 20--. ​ Required: Prepare the closing entries for the merchandising firm.

Match the terms with the definitions. -A trial balance taken after the temporary owner's equity accounts have been closed.

A formal statement of the results of the operation of a business during an accounting period is called a(n)

Match the terms with the definitions. -Those expenses associated with administrative or office operating expenses.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

Filters

The Income Statement and Balance Sheet columns below are from the work sheet of a merchandising firm, J. D. Enterprise, for the year ended December 31, 20--. Required: Prepare the closing entries for the merchandising firm.