Question 1

The ending balance for merchandise inventory is reported on the balance sheet as a noncurrent asset.

Accepted Answer

A) True 
 B)False

Question 2

Gross profit less operating expenses produces the income from operations.

Accepted Answer

A) True 
 B)False

Question 3

Long-term liabilities are obligations that will extend beyond one year or the normal operating cycle, whichever is longer.

Accepted Answer

A) True 
 B)False

Question 4

Reversing entries are made in the

Accepted Answer

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

Question 5

Quick assets include cash and other noncurrent assets that can be converted into cash quickly.

Accepted Answer

A) True 
 B)False

Question 6

Those obligations that are due within one year or the normal operating cycle of the business and will be paid with money provided by the current assets are called

Accepted Answer

A)  investments. 
B)  marketable securities. 
C)  current liabilities. 
D)  long-term liabilities. 
A)  investments. 
B)  marketable securities. 
C)  current liabilities. 
D)  long-term liabilities.

Question 7

The multiple-step form of income statement shows operating income separate from other revenue and other expenses.

Accepted Answer

A) True 
 B)False

Question 8

The purpose of a balance sheet is to summarize the results of operations during an accounting period.

Accepted Answer

A) True 
 B)False

Question 9

Match the terms with the definitions.
-Those obligations that are due within one year or the normal operating cycle of the business, whichever is longer, and will require the use of current assets.

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 10

Working capital is the amount of capital the firm has to work with for current operations.

Accepted Answer

A) True 
 B)False

Question 11

The following adjusted trial balance was taken from the work sheet of Babylon Lighting. Assume the owner, Jillian Johnson, made no additional investments during the year.   ​
Required:
Prepare a classified balance sheet for Babylon Lighting as of December 31, 20--.

Accepted Answer

The answer of The following adjusted trial balance was taken...

Question 12

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

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 13

Gross sales less sales returns and allowances is called net sales.

Accepted Answer

A) True 
 B)False

Question 14

Return on owner's equity is the ratio of net income to average owner's equity in the business.

Accepted Answer

A) True 
 B)False

Question 15

The adjusting entries for Down Town Cafe are shown in journal form below. Journalize the reversing entries as of March 1.

Accepted Answer

The answer of The adjusting entries for Down Town Cafe...

Question 16

The following information was taken from the financial statements of Collin's Inn: Total current assets
$162,000
Average owner's equity
148,000
Beginning inventory
32,000
Ending inventory
36,000
Cost of goods sold
165,000
Net income
37,000
​
The return on owner's equity for Collin's Inn is

Accepted Answer

A)  25%. 
B)  27%. 
C)  80%. 
D)  129%. 
A)  25%. 
B)  27%. 
C)  80%. 
D)  129%.

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

The ending balance for merchandise inventory is reported on the balance sheet as a noncurrent asset.

Gross profit less operating expenses produces the income from operations.

Long-term liabilities are obligations that will extend beyond one year or the normal operating cycle, whichever is longer.

Reversing entries are made in the

Quick assets include cash and other noncurrent assets that can be converted into cash quickly.

Those obligations that are due within one year or the normal operating cycle of the business and will be paid with money provided by the current assets are called

The multiple-step form of income statement shows operating income separate from other revenue and other expenses.

The purpose of a balance sheet is to summarize the results of operations during an accounting period.

Match the terms with the definitions. -Those obligations that are due within one year or the normal operating cycle of the business, whichever is longer, and will require the use of current assets.

Working capital is the amount of capital the firm has to work with for current operations.

The following adjusted trial balance was taken from the work sheet of Babylon Lighting. Assume the owner, Jillian Johnson, made no additional investments during the year. ​ Required: Prepare a classified balance sheet for Babylon Lighting as of December 31, 20--.

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

Gross sales less sales returns and allowances is called net sales.

Return on owner's equity is the ratio of net income to average owner's equity in the business.

The adjusting entries for Down Town Cafe are shown in journal form below. Journalize the reversing entries as of March 1.

The following information was taken from the financial statements of Collin's Inn: Total current assets $162,000 Average owner's equity 148,000 Beginning inventory 32,000 Ending inventory 36,000 Cost of goods sold 165,000 Net income 37,000 ​ The return on owner's equity for Collin's Inn is

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 following adjusted trial balance was taken from the work sheet of Babylon Lighting. Assume the owner, Jillian Johnson, made no additional investments during the year. Required: Prepare a classified balance sheet for Babylon Lighting as of December 31, 20--.

The following information was taken from the financial statements of Collin's Inn: Total current assets $162,000 Average owner's equity 148,000 Beginning inventory 32,000 Ending inventory 36,000 Cost of goods sold 165,000 Net income 37,000 The return on owner's equity for Collin's Inn is