Exam 11: Preparing a Worksheet for a Merchandise Company

What inventory method is used when the inventory balance is updated only at the end of the accounting period?

The first entry to adjust Merchandise Inventory includes:

Calculate the missing figures (a-k) in each of the following independent scenarios. -

Camping for Fun purchased merchandise costing $1,200. Calculate the cost of goods sold under the following different situations: a) Beginning inventory $250 and no ending inventory. b) Beginning inventory $300 and a $200 ending inventory. c) No beginning inventory and a $100 ending inventory.

The ending inventory in Year 1 is the beginning inventory in Year 2.

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). -

Under the periodic inventory method, indicate the financial statement(s) on which you would find the following items: a) Cost of goods sold b) Freight-In c) Ending Inventory d) Beginning Inventory e) Purchase Discounts

Indicate the normal balance of each of the following accounts: a) Purchases Returns and Allowances b) Merchandise Inventory c) Freight-In d) Sales Returns and allowances e) Unearned Revenue

Discuss the reasons a company would consider using a periodic inventory system.

This amount does NOT change during the period and is added to purchases when computing the cost of goods available for sale.

When the adjustment for Unearned Rent Revenue is made:

Which of the following accounts is NOT a liability?

The income statement columns on a worksheet have subtotals as follows: debit column, $12,000, and credit column, $9,300. This indicates that:

The normal balance of Rental Income is:

Adjustments are journalized before recording them in the worksheet.

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). -

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). -

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). -

Tim received $3,000 in advance for renting part of his building for 4 months. What is the entry to record the adjustment after one month has passed?

Doug paid $3,000 on a one-year insurance policy on March 1. The entry included a debit to Prepaid Insurance. The adjusting entry on December 31 of Year 1 would include a: