Question 1

An item that can be converted into cash or used up during the normal operating cycle is:

Accepted Answer

A) a current asset. 
B) Plant and Equipment. 
C) a current liability. 
D) a long-term liability. 
A) a current asset. 
B) Plant and Equipment. 
C) a current liability. 
D) a long-term liability.

Question 2

Administrative Expenses include:

Accepted Answer

A) Insurance Expense. 
B) Delivery Expense. 
C) Advertising Expense. 
D) None of the above are correct. 
A) Insurance Expense. 
B) Delivery Expense. 
C) Advertising Expense. 
D) None of the above are correct.

Question 3

After the closing process, the temporary accounts are set back to zero.

Accepted Answer

A) True 
 B)False

Question 4

Gross Profit equals:

Accepted Answer

A) Net sales - Other Expenses. 
B) Sales - Sales Returns and Allowances - Sales Discounts - Cost of Goods Sold. 
C) Cost of Goods Sold - Other Expenses. 
D) Cost of Goods Sold - Operating Expenses. 
A) Net sales - Other Expenses. 
B) Sales - Sales Returns and Allowances - Sales Discounts - Cost of Goods Sold. 
C) Cost of Goods Sold - Other Expenses. 
D) Cost of Goods Sold - Operating Expenses.

Question 5

Other Expense is used to record:

Accepted Answer

A) selling expenses. 
B) administrative expenses. 
C) operating expenses. 
D) non-operating expenses. 
A) selling expenses. 
B) administrative expenses. 
C) operating expenses. 
D) non-operating expenses.

Question 6

How is Income Summary closed if the company had a net loss?

Accepted Answer

A) Credit Income Summary; debit Capital 
B) Debit Income Summary; credit Capital 
C) Debit Capital; credit Withdrawals 
D) Debit Withdrawals; credit Capital 
A) Credit Income Summary; debit Capital 
B) Debit Income Summary; credit Capital 
C) Debit Capital; credit Withdrawals 
D) Debit Withdrawals; credit Capital

Question 7

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 8

Determine the ending inventory of a business having:
Beginning Capital $6,000
Net sales of $50,000
Net purchases of $30,500
Freight-in of $2,000
Beginning inventory of $4,000
Ending Capital of $10,000
Operating expenses of $14,000
$ ________

Accepted Answer

The answer of Determine the ending inventory of a business...

Question 9

The amount shown in the adjustments credit column for Merchandise Inventory on the worksheet is:

Accepted Answer

A) beginning inventory. 
B) ending inventory. 
C) total purchases. 
D) Cost of Goods Sold. 
A) beginning inventory. 
B) ending inventory. 
C) total purchases. 
D) Cost of Goods Sold.

Question 10

Determine the ending Capital balance of a business having:
Beginning Capital of $50,000
No investments or withdrawals
Beginning inventory of $10,000
Net Purchases of $90,000
Ending inventory of $12,000
Operating expenses of $72,000
Net sales $190,000
$ ________

Accepted Answer

The answer of Determine the ending Capital balance of a...

Question 11

Merchandise purchased for resale under the perpetual 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 12

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 13

Beginning inventory is adjusted by debiting Income Summary and crediting Merchandise Inventory.

Accepted Answer

A) True 
 B)False

Question 14

Gross profit minus Operating Expenses equals Net Income.

Accepted Answer

A) True 
 B)False

Question 15

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).
-

Accepted Answer

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

Question 16

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).
-

Accepted Answer

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

Question 17

The entry to record the adjustment for depreciation on equipment would be a debit to Depreciation Expense-Equipment and a credit to Equipment.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following accounts will not appear on the post-closing trial balance?

Accepted Answer

A) Capital 
B) Cash 
C) Accounts Payable 
D) Withdrawals 
A) Capital 
B) Cash 
C) Accounts Payable 
D) Withdrawals

Question 19

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).
-Prepare closing entries from the following information on the Warner Books worksheet income statement columns. Additional information: Withdrawals equal $20 for the period.

Accepted Answer

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

Question 20

The ending merchandise inventory was understated. This error would cause:

Accepted Answer

A) assets to be understated. 
B) assets to be overstated. 
C) net income to be overstated. 
D) None of these are correct. 
A) assets to be understated. 
B) assets to be overstated. 
C) net income to be overstated. 
D) None of these are correct.

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

An item that can be converted into cash or used up during the normal operating cycle is:

Administrative Expenses include:

After the closing process, the temporary accounts are set back to zero.

Gross Profit equals:

Other Expense is used to record:

How is Income Summary closed if the company had a net loss?

Which amount is directly found on the worksheet?

Determine the ending inventory of a business having: Beginning Capital $6,000 Net sales of $50,000 Net purchases of $30,500 Freight-in of $2,000 Beginning inventory of $4,000 Ending Capital of $10,000 Operating expenses of $14,000 $ ________

The amount shown in the adjustments credit column for Merchandise Inventory on the worksheet is:

Determine the ending Capital balance of a business having: Beginning Capital of $50,000 No investments or withdrawals Beginning inventory of $10,000 Net Purchases of $90,000 Ending inventory of $12,000 Operating expenses of $72,000 Net sales $190,000 $ ________

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

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

Beginning inventory is adjusted by debiting Income Summary and crediting Merchandise Inventory.

Gross profit minus Operating Expenses equals Net Income.

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). -

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). -

The entry to record the adjustment for depreciation on equipment would be a debit to Depreciation Expense-Equipment and a credit to Equipment.

Which of the following accounts will not appear on the post-closing trial balance?

The ending merchandise inventory was understated. This error would cause:

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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