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

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?

In closing entries, the Income Summary account is closed to the Capital account after Withdrawals.

When calculating Cost of Goods Sold on the Income Statement, the beginning and ending inventory values are both required.

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

Plant and Equipment is usually listed:

The Statement of Owner's Equity is the same for a service business as for a merchandise business.

When closing sales, which of the following accounts will also be closed?

The following accounts are on the Balance Sheet section of Scents Galore worksheet for the date November 30, 200X. Additional information: Withdrawals for the period are $4, and Net Income is $12.

Adjusting journal entries still need to be made after the worksheet; otherwise the account balances will not be correct.

Identify the category(s)of each of the accounts below. Current Asset Plant and Equipment Current Liabilities Long-Term Liabilities

Cost of Goods Sold is calculated on the:

Plant and Equipment includes which of the following?

The entry to close the expense account(s)was entered in reverse-Income Summary was credited and the expense account(s)was/were debited. This error would cause:

To determine how much merchandise a company has returned to its vendors, it should review the:

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

A company paid next month's rent in advance. This would be classified as a(n):

To determine how much merchandise was returned from a company's customers, the company should review the:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). -

Selling expenses include:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the account's nature (permanent/temporary). -