Question 1

Which inventory appears in the balance sheet column of the worksheet?

Accepted Answer

A)  Ending inventory 
B)  Beginning inventory 
C)  Ending supplies 
D)  Purchases 
A)  Ending inventory 
B)  Beginning inventory 
C)  Ending supplies 
D)  Purchases

Question 2

Under the accrual system, revenue is recognized when cash is paid.

Accepted Answer

A) True 
 B)False

Question 3

From the following items, which would most likely cause the recording of unearned revenue?

Accepted Answer

A)  Receipt of a purchase order 
B)  Purchase of merchandise on account 
C)  Legal fees collected after work is performed 
D)  Subscriptions collected in advance for a magazine 
A)  Receipt of a purchase order 
B)  Purchase of merchandise on account 
C)  Legal fees collected after work is performed 
D)  Subscriptions collected in advance for a magazine

Question 4

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).
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Accepted Answer

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

Question 5

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).
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Accepted Answer

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

Question 6

Recording the adjustment for supplies used will:

Accepted Answer

A)  increase the total liability and increase the total expenses. 
B)  increase the total assets and increase the total liabilities. 
C)  decrease the total assets and increase the total expenses. 
D)  decrease the merchandise inventory and decrease the total expenses. 
A)  increase the total liability and increase the total expenses. 
B)  increase the total assets and increase the total liabilities. 
C)  decrease the total assets and increase the total expenses. 
D)  decrease the merchandise inventory and decrease the total expenses.

Question 7

Calculate: (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following:

Accepted Answer

a) $2,770

Question 8

In the perpetual inventory system, it is not necessary to take a physical inventory at the end of the period.

Accepted Answer

A) True 
 B)False

Question 9

If gross profit exceeds operating expenses, the company:

Accepted Answer

A)  had a net loss. 
B)  broke even. 
C)  had a net income. 
D)  liabilities are greater than assets. 
A)  had a net loss. 
B)  broke even. 
C)  had a net income. 
D)  liabilities are greater than assets.

Question 10

Mortgage Payable:

Accepted Answer

A)  has a debit balance. 
B)  has a credit balance. 
C)  shows the amount expected to be paid within the current period. 
D)  is an unsecured loan. 
A)  has a debit balance. 
B)  has a credit balance. 
C)  shows the amount expected to be paid within the current period. 
D)  is an unsecured loan.

Question 11

Ending inventory:

Accepted Answer

A)  increases Cost of Goods Sold. 
B)  decreases Cost of Goods Sold. 
C)  does not affect Cost of Goods Sold. 
D)  increases Purchases. 
A)  increases Cost of Goods Sold. 
B)  decreases Cost of Goods Sold. 
C)  does not affect Cost of Goods Sold. 
D)  increases Purchases.

Question 12

Under the periodic inventory method, the beginning and ending inventories are combined and an average calculated to determine the balance sheet inventory amount.

Accepted Answer

A) True 
 B)False

Question 13

Beginning and ending inventories for Jim's Books are $12,800 and $8,400, respectively. The debit amounts (not including Income Summary) in the income statement columns of the worksheet total $13,800, and the credit amounts (not including Income Summary) total $15,000. The firm has a:

Accepted Answer

A)  net income of $3,200. 
B)  net loss of $3,200. 
C)  net loss of $4,400. 
D)  net income of $4,400. 
A)  net income of $3,200. 
B)  net loss of $3,200. 
C)  net loss of $4,400. 
D)  net income of $4,400.

Question 14

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).
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Accepted Answer

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

Question 15

Green Realty paid $6,000 rent on a building in advance for two years on May 1. The amount that should be recorded as rent expense as of December 31 at the end of Year 1 is:

Accepted Answer

A)  $2,000. 
B)  $6,000. 
C)  $3,000. 
D)  $1,750. 
A)  $2,000. 
B)  $6,000. 
C)  $3,000. 
D)  $1,750.

Question 16

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).
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Accepted Answer

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

Question 17

When using the Periodic method, Merchandise Inventory (ending) appears on both the Income Statement and the Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 18

The adjusted trial balance on the worksheet:

Accepted Answer

A)  contains balances from the permanent accounts. 
B)  contains balances from the temporary accounts. 
C)  contains balances for all accounts with balances. 
D)  contains balances for all accounts requiring adjustments. 
A)  contains balances from the permanent accounts. 
B)  contains balances from the temporary accounts. 
C)  contains balances for all accounts with balances. 
D)  contains balances for all accounts requiring adjustments.

Question 19

Marie's Law Firm's unadjusted trial balance includes the following:   Using the above data, record the adjusting entry for $1,000 of the unearned legal fees earned.

Accepted Answer

The answer of Marie's Law Firm's unadjusted trial balance includes...

Question 20

On the worksheet, the Beginning Inventory account is found in the debit column of the Balance Sheet.

Accepted Answer

A) True 
 B)False

Exam 11: Preparing a Worksheet for a Merchandise Company

Which inventory appears in the balance sheet column of the worksheet?

Under the accrual system, revenue is recognized when cash is paid.

From the following items, which would most likely cause the recording of unearned revenue?

Recording the adjustment for supplies used will:

Calculate: (a) net sales, (b) cost of goods sold, (c) gross profit, and (d) net income from the following:

In the perpetual inventory system, it is not necessary to take a physical inventory at the end of the period.

If gross profit exceeds operating expenses, the company:

Mortgage Payable:

Ending inventory:

Under the periodic inventory method, the beginning and ending inventories are combined and an average calculated to determine the balance sheet inventory amount.

Beginning and ending inventories for Jim's Books are $12,800 and $8,400, respectively. The debit amounts (not including Income Summary) in the income statement columns of the worksheet total $13,800, and the credit amounts (not including Income Summary) total $15,000. The firm has a:

Green Realty paid $6,000 rent on a building in advance for two years on May 1. The amount that should be recorded as rent expense as of December 31 at the end of Year 1 is:

When using the Periodic method, Merchandise Inventory (ending) appears on both the Income Statement and the Balance Sheet.

The adjusted trial balance on the worksheet:

Marie's Law Firm's unadjusted trial balance includes the following: Using the above data, record the adjusting entry for $1,000 of the unearned legal fees earned.

On the worksheet, the Beginning Inventory account is found in the debit column of the Balance Sheet.

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

Completion of the Accounting Cycle 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

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