Question 1

The goal of closing entries is:

Accepted Answer

A) to clear revenue and expense accounts. 
B) to update the Capital account balance. 
C) to clear the Withdrawal account. 
D) All of these answers are correct. 
A) to clear revenue and expense accounts. 
B) to update the Capital account balance. 
C) to clear the Withdrawal account. 
D) All of these answers are correct.

Question 2

The entry to close the Withdrawals account to Capital was omitted. 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 3

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 4

Determine the ending Capital amount of a business having:
Beginning Capital amount of $30,000
Withdrawals of $ 1,500
Net sales of $150,000
Net purchases of $80,000
Freight-in of $1,500
Beginning inventory of $6,000
Ending inventory of $7,000
Operating expenses of $ 32,000
$ ________

Accepted Answer

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

Question 5

In what category in a classified balance sheet is Mortgage Payable found?

Accepted Answer

A) Plant and Equipment 
B) Current Liabilities 
C) Long-term Liabilities 
D) Both B and C are correct. 
A) Plant and Equipment 
B) Current Liabilities 
C) Long-term Liabilities 
D) Both B and C are correct.

Question 6

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 7

Net Purchases are:

Accepted Answer

A) Total Purchases + Purchases Discounts + Purchases Returns and Allowances. 
B) Total Purchases + Purchases Discounts - Purchases Returns and Allowances. 
C) Total Purchases - Purchases Discounts - Purchases Returns and Allowances. 
D) None of these are correct. 
A) Total Purchases + Purchases Discounts + Purchases Returns and Allowances. 
B) Total Purchases + Purchases Discounts - Purchases Returns and Allowances. 
C) Total Purchases - Purchases Discounts - Purchases Returns and Allowances. 
D) None of these are correct.

Question 8

Freight-in is:

Accepted Answer

A) a Cost of Selling Goods. 
B) a Cost of Purchasing Goods. 
C) recorded as an Operating Expense. 
D) recorded as an asset. 
A) a Cost of Selling Goods. 
B) a Cost of Purchasing Goods. 
C) recorded as an Operating Expense. 
D) recorded as an asset.

Question 9

All adjusting entries can be reversed.

Accepted Answer

A) True 
 B)False

Question 10

Closing entries:

Accepted Answer

A) are posted to the general ledger. 
B) are done to update Cash. 
C) can be done before adjusting entries. 
D) All of the above are correct. 
A) are posted to the general ledger. 
B) are done to update Cash. 
C) can be done before adjusting entries. 
D) All of the above are correct.

Question 11

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 12

The information to prepare the Statement of Owner's Equity comes from the:

Accepted Answer

A) income statement columns on the worksheet. 
B) adjustments columns on the worksheet. 
C) balance sheet columns on the worksheet. 
D) general ledger. 
A) income statement columns on the worksheet. 
B) adjustments columns on the worksheet. 
C) balance sheet columns on the worksheet. 
D) general ledger.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A classified balance sheet provides more information about the company to:

Accepted Answer

A) owners. 
B) creditors. 
C) suppliers. 
D) All of the above answers are correct. 
A) owners. 
B) creditors. 
C) suppliers. 
D) All of the above answers are correct.

Question 15

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

Accepted Answer

A) Purchases Returns and Allowances 
B) Merchandise Inventory 
C) Sales Returns and Allowances 
D) Owner's Capital 
A) Purchases Returns and Allowances 
B) Merchandise Inventory 
C) Sales Returns and Allowances 
D) Owner's Capital

Question 16

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

Accepted Answer

A) net income to be understated. 
B) assets to be understated. 
C) net income to be overstated. 
D) expense to be overstated. 
A) net income to be understated. 
B) assets to be understated. 
C) net income to be overstated. 
D) expense to be overstated.

Question 17

Net Purchases + Purchases Returns and Allowances + Purchase Discount equals:

Accepted Answer

A) Net Loss. 
B) Net Income. 
C) Gross Profit. 
D) Gross Purchases. 
A) Net Loss. 
B) Net Income. 
C) Gross Profit. 
D) Gross Purchases.

Question 18

The post-closing trial balance contains:

Accepted Answer

A) assets and liabilities. 
B) all accounts with balances. 
C) only permanent accounts. 
D) All of these answers are correct. 
A) assets and liabilities. 
B) all accounts with balances. 
C) only permanent accounts. 
D) All of these answers are correct.

Question 19

Discuss the purpose of a classified balance sheet. Include a description of the major balance sheet classifications including: current assets, plant and equipment, current liabilities, and long-term liabilities.

Accepted Answer

A classified balance sheet provides more

Question 20

In what category in a classified balance sheet is Accounts Receivable found?

Accepted Answer

A) Plant and Equipment 
B) Current Liabilities 
C) Current Assets 
D) Owner's Equity 
A) Plant and Equipment 
B) Current Liabilities 
C) Current Assets 
D) Owner's Equity

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

The goal of closing entries is:

The entry to close the Withdrawals account to Capital was omitted. This error would cause:

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). -

Determine the ending Capital amount of a business having: Beginning Capital amount of $30,000 Withdrawals of $ 1,500 Net sales of $150,000 Net purchases of $80,000 Freight-in of $1,500 Beginning inventory of $6,000 Ending inventory of $7,000 Operating expenses of $ 32,000 $ ________

In what category in a classified balance sheet is Mortgage Payable found?

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

Net Purchases are:

Freight-in is:

All adjusting entries can be reversed.

Closing entries:

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

The information to prepare the Statement of Owner's Equity comes from the:

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

A classified balance sheet provides more information about the company to:

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

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

Net Purchases + Purchases Returns and Allowances + Purchase Discount equals:

The post-closing trial balance contains:

Discuss the purpose of a classified balance sheet. Include a description of the major balance sheet classifications including: current assets, plant and equipment, current liabilities, and long-term liabilities.

In what category in a classified balance sheet is Accounts Receivable found?

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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