Question 1

Cash received in advance for performing a service or delivering a product is called unearned revenue.

Accepted Answer

A) True 
 B)False

Question 2

The income summary account will always reflect the same balance as the merchandise inventory account at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 3

Match the terms with the definitions.
-Cash received in advance of delivering a product or performing a service.

Accepted Answer

A) contra-cost accounts 
B) contra-revenue accounts 
C) physical inventory 
D) unearned revenue 
A) contra-cost accounts 
B) contra-revenue accounts 
C) physical inventory 
D) unearned revenue

Question 4

Which account balance is NOT used to compute the cost of goods sold?

Accepted Answer

A)  Sales 
B)  Merchandise Inventory 
C)  Purchases 
D)  Purchases Discounts 
A)  Sales 
B)  Merchandise Inventory 
C)  Purchases 
D)  Purchases Discounts

Question 5

A contra-revenue account is given a ".1" extension to its related ledger account's number.

Accepted Answer

A) True 
 B)False

Question 6

Match the terms with the definitions.
-Accounts that are deducted from Sales on the income statement (i.e., Sales Returns and Allowances, Sales Discounts).

Accepted Answer

A) contra-cost accounts 
B) contra-revenue accounts 
C) physical inventory 
D) unearned revenue 
A) contra-cost accounts 
B) contra-revenue accounts 
C) physical inventory 
D) unearned revenue

Question 7

The transaction to record unearned revenue results in an increase to an asset account.

Accepted Answer

A) True 
 B)False

Question 8

At the end of the accounting period, the correct entry in the general journal to adjust for ending inventory is to

Accepted Answer

A)  debit Merchandise Inventory and credit Unearned Revenue. 
B)  debit Income Summary and credit Merchandise Inventory. 
C)  debit Merchandise Inventory and credit Income Summary. 
D)  debit Other Revenue and credit Income Summary. 
A)  debit Merchandise Inventory and credit Unearned Revenue. 
B)  debit Income Summary and credit Merchandise Inventory. 
C)  debit Merchandise Inventory and credit Income Summary. 
D)  debit Other Revenue and credit Income Summary.

Question 9

When unearned revenue is finally earned, a revenue account is debited to reflect the amount of the revenue earned.

Accepted Answer

A) True 
 B)False

Question 10

Sports, Inc., plans to sell season football tickets for the 10 games played from September through November. These tickets sell for $5 each at the gate or for $45 per season package purchased before April 30. On April 30, the office reports that it has sold 200 season ticket packages and has only 50 left. The correct entry to record the sale of the season tickets is

Accepted Answer

A)  debit Cash and credit Unearned Revenue for $9,000. 
B)  debit Cash and credit Revenue for $11,250. 
C)  debit Unearned Revenue and credit Revenue for $9,000. 
D)  to determine cost of goods sold. 
A)  debit Cash and credit Unearned Revenue for $9,000. 
B)  debit Cash and credit Revenue for $11,250. 
C)  debit Unearned Revenue and credit Revenue for $9,000. 
D)  to determine cost of goods sold.

Question 11

After adjustments are made to the merchandise inventory account and posting is completed, the income summary account will reflect both the amount of beginning and ending inventory.

Accepted Answer

A) True 
 B)False

Question 12

Only the adjusted credit balance in the merchandise inventory account is extended to the Adjusted Trial Balance columns of the work sheet.

Accepted Answer

A) True 
 B)False

Question 13

After journalizing adjusting entries, the amounts must be posted to the accounts in the general ledger.

Accepted Answer

A) True 
 B)False

Question 14

The adjusted balance of the merchandise inventory account is extended to the Balance Sheet columns of the work sheet.

Accepted Answer

A) True 
 B)False

Question 15

The credit to the merchandise inventory account when making adjustments at the end of the accounting period will be the same amount as was debited at the end of the previous accounting period.

Accepted Answer

A) True 
 B)False

Question 16

On a work sheet, the amount entered in the Credit column of the Balance Sheet to balance the debits and credits is $56,000. This represents

Accepted Answer

A)  an error of $28,000 in balancing the accounts. 
B)  a net income of $56,000. 
C)  a net loss of $56,000. 
D)  accumulated depreciation and other expenses. 
A)  an error of $28,000 in balancing the accounts. 
B)  a net income of $56,000. 
C)  a net loss of $56,000. 
D)  accumulated depreciation and other expenses.

Question 17

The merchandise inventory account always reflects the current inventory on hand.

Accepted Answer

A) True 
 B)False

Question 18

Merchandise Inventory is listed as a(n)

Accepted Answer

A)  current asset. 
B)  current liability. 
C)  expense. 
D)  revenue. 
A)  current asset. 
B)  current liability. 
C)  expense. 
D)  revenue.

Question 19

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to

Accepted Answer

A)  debit Purchases and credit Merchandise Inventory. 
B)  debit Merchandise Inventory and credit Sales. 
C)  debit Income Summary and credit Merchandise Inventory. 
D)  debit the Capital account and credit a revenue account. 
A)  debit Purchases and credit Merchandise Inventory. 
B)  debit Merchandise Inventory and credit Sales. 
C)  debit Income Summary and credit Merchandise Inventory. 
D)  debit the Capital account and credit a revenue account.

Question 20

If beginning inventory is $80,000 and ending inventory is $10,000, the balance of the merchandise inventory account after adjustments will be $70,000.

Accepted Answer

A) True 
 B)False

Cash received in advance for performing a service or delivering a product is called unearned revenue.

The income summary account will always reflect the same balance as the merchandise inventory account at the end of the accounting period.

Match the terms with the definitions. -Cash received in advance of delivering a product or performing a service.

Which account balance is NOT used to compute the cost of goods sold?

A contra-revenue account is given a ".1" extension to its related ledger account's number.

Match the terms with the definitions. -Accounts that are deducted from Sales on the income statement (i.e., Sales Returns and Allowances, Sales Discounts).

The transaction to record unearned revenue results in an increase to an asset account.

At the end of the accounting period, the correct entry in the general journal to adjust for ending inventory is to

When unearned revenue is finally earned, a revenue account is debited to reflect the amount of the revenue earned.

After adjustments are made to the merchandise inventory account and posting is completed, the income summary account will reflect both the amount of beginning and ending inventory.

Only the adjusted credit balance in the merchandise inventory account is extended to the Adjusted Trial Balance columns of the work sheet.

After journalizing adjusting entries, the amounts must be posted to the accounts in the general ledger.

The adjusted balance of the merchandise inventory account is extended to the Balance Sheet columns of the work sheet.

The credit to the merchandise inventory account when making adjustments at the end of the accounting period will be the same amount as was debited at the end of the previous accounting period.

On a work sheet, the amount entered in the Credit column of the Balance Sheet to balance the debits and credits is $56,000. This represents

The merchandise inventory account always reflects the current inventory on hand.

Merchandise Inventory is listed as a(n)

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to

If beginning inventory is $80,000 and ending inventory is $10,000, the balance of the merchandise inventory account after adjustments will be $70,000.

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: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for a Professional Service Business: The Combination Journal

Filters

Exam 14: Adjustments and the Work Sheet for a Merchandising Business

Cash received in advance for performing a service or delivering a product is called unearned revenue.

The income summary account will always reflect the same balance as the merchandise inventory account at the end of the accounting period.

Match the terms with the definitions. -Cash received in advance of delivering a product or performing a service.

Which account balance is NOT used to compute the cost of goods sold?

A contra-revenue account is given a ".1" extension to its related ledger account's number.

Match the terms with the definitions. -Accounts that are deducted from Sales on the income statement (i.e., Sales Returns and Allowances, Sales Discounts).

The transaction to record unearned revenue results in an increase to an asset account.

At the end of the accounting period, the correct entry in the general journal to adjust for ending inventory is to

When unearned revenue is finally earned, a revenue account is debited to reflect the amount of the revenue earned.

After adjustments are made to the merchandise inventory account and posting is completed, the income summary account will reflect both the amount of beginning and ending inventory.

Only the adjusted credit balance in the merchandise inventory account is extended to the Adjusted Trial Balance columns of the work sheet.

After journalizing adjusting entries, the amounts must be posted to the accounts in the general ledger.

The adjusted balance of the merchandise inventory account is extended to the Balance Sheet columns of the work sheet.

The credit to the merchandise inventory account when making adjustments at the end of the accounting period will be the same amount as was debited at the end of the previous accounting period.

On a work sheet, the amount entered in the Credit column of the Balance Sheet to balance the debits and credits is $56,000. This represents

The merchandise inventory account always reflects the current inventory on hand.

Merchandise Inventory is listed as a(n)

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to

If beginning inventory is $80,000 and ending inventory is $10,000, the balance of the merchandise inventory account after adjustments will be $70,000.

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: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for a Professional Service Business: The Combination Journal

Filters