Question 1

Non-operating expenses are found in the Cost of Goods Sold section of the income statement.

Accepted Answer

A) True 
 B)False

Question 2

The entry to close the owner's Withdrawal account will include which of the following?

Accepted Answer

A) A debit to Income Summary 
B) A credit to Capital 
C) A credit to Withdrawals 
D) A debit to Withdrawals 
A) A debit to Income Summary 
B) A credit to Capital 
C) A credit to Withdrawals 
D) A debit to Withdrawals

Question 3

Which amount is directly found on the worksheet?

Accepted Answer

A) Cost of Goods Sold 
B) Purchases 
C) Gross Profit 
D) Net Sales 
A) Cost of Goods Sold 
B) Purchases 
C) Gross Profit 
D) Net Sales

Question 4

Identify the category(s)of each of the accounts below.
Current Asset
Plant and Equipment
Current Liabilities
Long-Term Liabilities
$\begin{array}{lc}
\underline{\text { Item }}& \underline{\text { Category }}&\
{\text { 0) Cash }} & \text { Current Asset }&\underline{\quad\quad} \
\text { a) Accts. Receivable } & \underline{\quad\quad}&\underline{\quad\quad}\
\text { b) Accts. Payable } &\underline{\quad\quad}&\underline{\quad\quad} \
\text { c) Mortgage Payable } & \underline{\quad\quad}&\underline{\quad\quad} \
\text { d) Building } & \underline{\quad\quad}&\underline{\quad\quad}\
\text { e) Prepaid Insurance } & \underline{\quad\quad}&\underline{\quad\quad}
\end{array}$

Accepted Answer

The answer of Identify the category(s)of each of the accounts...

Question 5

The average time it takes to buy and sell merchandise and collect Accounts Receivable is the normal operating cycle for a business.

Accepted Answer

A) True 
 B)False

Question 6

The statement of owner's equity ending capital is equal to the capital on the worksheet.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following transactions could cause the Income Summary to be debited and Capital to be credited?

Accepted Answer

A) The business earned a net loss for the period. 
B) The business earned a net income for the period. 
C) Closed the Owner's Capital account 
D) None of these are correct. 
A) The business earned a net loss for the period. 
B) The business earned a net income for the period. 
C) Closed the Owner's Capital account 
D) None of these are correct.

Question 8

The formal income statement can be prepared from the income statement columns of the worksheet.

Accepted Answer

A) True 
 B)False

Question 9

The general ledger balances are used to prepare the post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 10

The following accounts are on the Balance Sheet section of Great Lakes Camping worksheet for the month ended January 31,200x.Required: Prepare a classified balance sheet.
 $$\begin{array} { | l | l | l | } 
\hline \text { Account } & \text { Balance Sheet Debit } & \text { Balance Sheet Credit } \
\hline \text { Cash } & 2 & \
\hline \text { Accounts Receivable } & 14 & \
\hline \text { Merchandise Inventory } & 12 & \
\hline \text { Store Equipment } & 6 & \
\hline \text { Accumulated Depreciation - Store } & &  \
 \text { Equipment } & & 2 \
\hline \text { Accounts Payable } & & 3\
\hline \text { Mortgage Payable } & &16 \
\hline \text { Great Lakes, Capital } & &2 \
\hline
\end{array}$$ Additional information: Withdrawals for the period are $2,and Net Income is $3.

Accepted Answer

The answer of The following accounts are on the Balance...

Question 11

If beginning inventory is $5,000,ending inventory is $3,000,net purchases is $12,000 and Freight-in is $400,what is the Cost of Goods Sold?

Accepted Answer

A) $17,400 
B) $17,000 
C) $14,400 
D) $14,000 
A) $17,400 
B) $17,000 
C) $14,400 
D) $14,000

Question 12

A balance sheet where assets and liabilities are broken down into more detail is called a comprehensive balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

Ending inventory is adjusted by debiting Merchandise Inventory and crediting Capital.

Accepted Answer

A) True 
 B)False

Question 14

The amount for Cost of Goods Sold is found on the worksheet.

Accepted Answer

A) True 
 B)False

Question 15

Income Summary,before closing to Capital,contains a debit balance of $86 and a credit balance of $100.What is the entry to close Income Summary to Capital?

Accepted Answer

A) Debit Income Summary $100; credit Capital $100 
B) Debit Income Summary $86; credit Capital $86 
C) Debit Capital $14; credit Income Summary $14 
D) Debit Income Summary $14; credit Capital $14 
A) Debit Income Summary $100; credit Capital $100 
B) Debit Income Summary $86; credit Capital $86 
C) Debit Capital $14; credit Income Summary $14 
D) Debit Income Summary $14; credit Capital $14

Question 16

Merchandise purchased for resale under the periodic inventory method is added to:

Accepted Answer

A) Merchandise Inventory. 
B) Sales. 
C) Purchases. 
D) Inventory Expense. 
A) Merchandise Inventory. 
B) Sales. 
C) Purchases. 
D) Inventory Expense.

Question 17

The entry to close the Freight-In account will include which of the following?

Accepted Answer

A) Debit to Freight-In 
B) Credit to Income Summary 
C) Debit to Income Summary 
D) Debit to Freight-Out 
A) Debit to Freight-In 
B) Credit to Income Summary 
C) Debit to Income Summary 
D) Debit to Freight-Out

Question 18

The entry to close the Income Summary to Capital was omitted,there was a net income.This error would cause:

Accepted Answer

A) the Capital account to be understated. 
B) net income to be overstated. 
C) net income to be understated. 
D) the Capital account to be overstated. 
A) the Capital account to be understated. 
B) net income to be overstated. 
C) net income to be understated. 
D) the Capital account to be overstated.

Question 19

The following amounts are on the Bear Sporting Goods worksheet for the month ended October 31.Required: Calculate the following:
a)Net sales
b)Net purchases
c)Net cost of purchases
d)Cost of goods available for sale
e)Cost of goods sold
f)Gross profit
$\begin{array} { l c r } 
\text { Account } &{ \text { Income Statement } } \
& \text { Debit } & \text { Credit } \
\hline \hline \text { Sales } & & 40 \
\text { Sales Returns and Allowances } & 4 & \
\text { Sales Discounts } & 2 & \
\text { Income Summary } & 11 & 13 \
\text { Purchases } & 15 & \
\text { Purchases Discount } & & 2 \
\text { Purchases Returns and Allowances } & & 4 \
\text { Freight-In } & 2 &
\end{array}$

Accepted Answer

a)$42,b)$2

Question 20

Reversing entries are recorded on the first day of the new accounting period.

Accepted Answer

A) True 
 B)False

Exam 12: Completion of the Accounting Cycle for a Merchandise Company

Non-operating expenses are found in the Cost of Goods Sold section of the income statement.

The entry to close the owner's Withdrawal account will include which of the following?

Which amount is directly found on the worksheet?

Identify the category(s)of each of the accounts below. Current Asset Plant and Equipment Current Liabilities Long-Term Liabilities 0) Cash Current Asset a) Accts. Receivable b) Accts. Payable c) Mortgage Payable d) Building e) Prepaid Insurance

The average time it takes to buy and sell merchandise and collect Accounts Receivable is the normal operating cycle for a business.

The statement of owner's equity ending capital is equal to the capital on the worksheet.

Which of the following transactions could cause the Income Summary to be debited and Capital to be credited?

The formal income statement can be prepared from the income statement columns of the worksheet.

The general ledger balances are used to prepare the post-closing trial balance.

If beginning inventory is $5,000,ending inventory is $3,000,net purchases is $12,000 and Freight-in is $400,what is the Cost of Goods Sold?

A balance sheet where assets and liabilities are broken down into more detail is called a comprehensive balance sheet.

Ending inventory is adjusted by debiting Merchandise Inventory and crediting Capital.

The amount for Cost of Goods Sold is found on the worksheet.

Income Summary,before closing to Capital,contains a debit balance of $86 and a credit balance of $100.What is the entry to close Income Summary to Capital?

Merchandise purchased for resale under the periodic inventory method is added to:

The entry to close the Freight-In account will include which of the following?

The entry to close the Income Summary to Capital was omitted,there was a net income.This error would cause:

Reversing entries are recorded on the first day of the new accounting period.

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: The Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet 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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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