Exam 12: Financial Statements, Closing Entries, and Reversing Entries

Match the terms below with the correct definitions. -The ability to convert assets quickly into cash

Net Sales is

The calculation of the cost of goods available for sale is not affected by the amount of the beginning merchandise inventory.

A decrease in Rent Expense results in a decrease in gross profit.

What would be an appropriate account number for Unearned Revenues?

Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). ____Purchases Discounts ____Delivery Expense ____Depreciation Expense, Equipment ____Freight In ____Interest Income ____Sales Returns and Allowances ____Office Salary Expense ____Goods Available for Sale ____Cash Over and Short (credit balance) ____Sales Commissions Expense

An increase in Rent Expense results in a decrease in gross profit.

Current Assets consist of all of the following EXCEPT

The following accounts are from the Athletics Store worksheet dated March 31 of the current year: The data needed for adjustments on March 31 are as follows: Cash \ 8,250 Accounts Receivable 21,400 Merchandise Inventory 48,700 Store Supplies 3,106 Prepaid Insurance 2,380 Store Equipment 29,400 Accumulated Depreciation, Store Equipment 8,630 Accounts Payable 16,350 T. Phelps, Capital 157,900 T. Phelps, Drawing 32,570 Sales 203,842 Sales Returns and Allowances 1,770 Purchases 146,910 Purchases Returns and Allowances 3,527 Purchase Discounts 2,615 Freight In 6,947 Wages Expense 28,400 Advertising Expense 3,219 Rent Expense 19,200 Instructions: (Note: use t-accounts to assist in calculation the below items.) a-b. Merchandise Inventory, March $31 , \$ 46,250$ . c. Insurance expired for the year, $\$ 1,580$ . d. Depreciation for the year, $\$ 4,230$ . e. Accrued wages on January $31 , \$ 2,513$ . f. Supplies used during the year $\$ 950$ . 1.Journalize the adjusting entries. 2.Journalize the closing entries. 3.Journalize the reversing entries.

Working capital is equal to total assets minus current liabilities.

An example of Other Income for a firm other than a bank or real estate office is

The profit on merchandise sold after expenses is

Match the terms below with the correct definitions. -Sales minus the sum of sales returns and allowances and sales discounts

Land would appear on the balance sheet as

Working Capital =

Debts that are due and payable in less than a year

On the income statement, the ending merchandise inventory is deducted from the cost of goods available for sale to yield income from operations.

Cost of Goods Sold is an operating expense on the income statement.

Income from Operations is Gross Profit minus Operating Expenses.