Question 1

Accounts whose balances apply to one fiscal period only are called permanent accounts.

Accepted Answer

A) True 
 B)False

Question 2

Match the terms below with the correct definitions.
-The firm's excess of its current assets over its current liabilities

Accepted Answer

A) Property and equipment 
B) Reversing entries 
C) Gross profit 
D) Current ratio 
E) Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity 
A) Property and equipment 
B) Reversing entries 
C) Gross profit 
D) Current ratio 
E) Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity

Question 3

Liquidity is the ability to pay all current liabilities in one year.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true?

Accepted Answer

A)  The columns on the financial statements do not represent DR or CR columns. 
B)  The columns on the financial statement are for making computations. 
C)  The columns on the financial statement are for listing totals. 
D)  All of the above. 
A)  The columns on the financial statements do not represent DR or CR columns. 
B)  The columns on the financial statement are for making computations. 
C)  The columns on the financial statement are for listing totals. 
D)  All of the above.

Question 5

On the income statement, adding delivered cost of purchases to beginning merchandise inventory results in

Accepted Answer

A)  cost of goods available for sale. 
B)  gross profit. 
C)  cost of goods sold. 
D)  net income or net loss. 
E)  ending inventory. 
A)  cost of goods available for sale. 
B)  gross profit. 
C)  cost of goods sold. 
D)  net income or net loss. 
E)  ending inventory.

Question 6

Garcia Company has the following information as of December 31, the end of its fiscal year:
Instructions:
Using the information presented above, prepare the Cost of Goods Sold section of the income statement.
 $\begin{array}{lr}
\text { Purchases discounts } & 5,700 \
\text { Merchandise inventory, December } 31 & 1,57,300 \
\text { Purchases } & 51,300 \
\text { Merchandise inventory, January 1 } & 1,65,160 \
\text { Purchases returns and allowances } & 6,540 \
\text { Freight in } & 20,650 \
\text { Freight out } & 8,250
\end{array}$ ​

Accepted Answer

The answer of Garcia Company has the following information as...

Question 7

Net Sales is Sales minus Sales Returns and Allowances plus Sales Discounts.

Accepted Answer

A) True 
 B)False

Question 8

Examples of current assets are

Accepted Answer

A)  supplies capable of being used up within twelve months. 
B)  merchandise inventories convertible into cash within twelve months or less. 
C)  receivables convertible into cash within twelve months or less. 
D)  all of these. 
E)  none of these. 
A)  supplies capable of being used up within twelve months. 
B)  merchandise inventories convertible into cash within twelve months or less. 
C)  receivables convertible into cash within twelve months or less. 
D)  all of these. 
E)  none of these.

Question 9

Which statement is NOT true about the Chart of Accounts?

Accepted Answer

A)  The order of the chart of accounts is important. 
B)  The first digit in the account number helps identify and organize the accounts in the chart. 
C)  Income statement accounts are listed before balance sheet accounts. 
D)  None of the above are true. 
A)  The order of the chart of accounts is important. 
B)  The first digit in the account number helps identify and organize the accounts in the chart. 
C)  Income statement accounts are listed before balance sheet accounts. 
D)  None of the above are true.

Question 10

Purchases differ from delivered cost of purchases by the amount of

Accepted Answer

A)  Purchases Returns and Allowances, Purchases Discounts, and Freight In. 
B)  ending merchandise inventory. 
C)  the cost of goods available for sale. 
D)  the cost of goods sold. 
E)  beginning inventory. 
A)  Purchases Returns and Allowances, Purchases Discounts, and Freight In. 
B)  ending merchandise inventory. 
C)  the cost of goods available for sale. 
D)  the cost of goods sold. 
E)  beginning inventory.

Question 11

In the closing process, the Sales Returns and Allowances account is credited.

Accepted Answer

A) True 
 B)False

Question 12

Match the terms below with the correct definitions.
-Excess of gross profit over operating expenses

Accepted Answer

A) Property and equipment 
B) Reversing entries 
C) Gross profit 
D) Current ratio 
E) Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity 
A) Property and equipment 
B) Reversing entries 
C) Gross profit 
D) Current ratio 
E) Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity

Question 13

Selected account balances of Rich and Company as of December 31, the end of its fiscal year, are listed below in alphabetical order.
Instructions:
Based on the account balances above, prepare a classified balance sheet.
 $$\begin{array} { l r } 
\text { Accounts Payable } & 36,510 \
\text { Accounts Receivable } & 32,633 \
\text { Accumulated Depreciation, Building } & 39,350 \
\text { Accumulated Depreciation, Equipment } & 23,030 \
\text { Building } & 66,970 \
\text { Cash } & 28,705 \
\text { Equipment } & 36,720 \
\text { Land } & 13,580 \
\text { Merchandise Inventory } & 58,823 \
\text { Mortgage Payable } & 30,613 \
\text { Mortgage Payable (current portion) } & 4,100 \
\text { Notes Payable } & 5,200 \
\text { Notes Receivable } & 4,023 \
\text { Frepaid Insurance } & 3,113 \
\text { S. Rich, Capital } & 105,049 \
\text { Supplies } & 2,585 \
\text { Unearned Rent Income } & 1,000 \
\text { Wages Payable } & 2,300
\end{array}$$

Accepted Answer

The answer of Selected account balances of Rich and Company...

Question 14

Match the terms below with the correct definitions.
-Excess of net sales over the cost of goods sold

Accepted Answer

A) Property and equipment 
B) Reversing entries 
C) Gross profit 
D) Current ratio 
E) Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity 
A) Property and equipment 
B) Reversing entries 
C) Gross profit 
D) Current ratio 
E) Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity

Question 15

Identify each of the following items relating to sections of a balance sheet as Current Assets (CA), Property and Equipment (PE), Current Liabilities (CL), Long-Term Liabilities (LTL), or Owner's Equity (OE).
​
 ____Unearned Fees
____Supplies
____Building
____Mortgage Payable (due in 5 years)
____Wages Payable ____Accounts Receivable
____Land
____Frepaid Insurance
____Current portion Mortgage Payable
____P. Adams, Capital

Accepted Answer

The answer of Identify each of the following items relating...

Question 16

Which of the following are nominal accounts?

Accepted Answer

A)  Merchandise Inventory 
B)  Capital 
C)  Expenses 
D)  Cash 
A)  Merchandise Inventory 
B)  Capital 
C)  Expenses 
D)  Cash

Question 17

The ability of an asset to be quickly turned into cash

Accepted Answer

A)  Disposal 
B)  Liquidity 
C)  Accrual 
D)  Profitability 
A)  Disposal 
B)  Liquidity 
C)  Accrual 
D)  Profitability

Question 18

Assuming Net Sales is $180,000, Cost of Goods Sold is $79,000, Selling Expenses are $28,500, General Expenses are $22,800, and Interest Expense is $2,000, then Income from Operations is

Accepted Answer

A)  $27,700. 
B)  $49,700. 
C)  $101,000. 
D)  $95,300. 
E)  $72,500. 
A)  $27,700. 
B)  $49,700. 
C)  $101,000. 
D)  $95,300. 
E)  $72,500.

Question 19

Which of the following are NOT examples of General Expenses?

Accepted Answer

A)  Office Salary Expense 
B)  Advertising Expense 
C)  Rent Expense 
D)  Property Tax Expense 
A)  Office Salary Expense 
B)  Advertising Expense 
C)  Rent Expense 
D)  Property Tax Expense

Question 20

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

Accepted Answer

A) True 
 B)False

Accounts whose balances apply to one fiscal period only are called permanent accounts.

Match the terms below with the correct definitions. -The firm's excess of its current assets over its current liabilities

Liquidity is the ability to pay all current liabilities in one year.

Which of the following statements is true?

On the income statement, adding delivered cost of purchases to beginning merchandise inventory results in

Net Sales is Sales minus Sales Returns and Allowances plus Sales Discounts.

Examples of current assets are

Which statement is NOT true about the Chart of Accounts?

Purchases differ from delivered cost of purchases by the amount of

In the closing process, the Sales Returns and Allowances account is credited.

Match the terms below with the correct definitions. -Excess of gross profit over operating expenses

Match the terms below with the correct definitions. -Excess of net sales over the cost of goods sold

Which of the following are nominal accounts?

The ability of an asset to be quickly turned into cash

Assuming Net Sales is $180,000, Cost of Goods Sold is $79,000, Selling Expenses are $28,500, General Expenses are $22,800, and Interest Expense is $2,000, then Income from Operations is

Which of the following are NOT examples of General Expenses?

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

Asset, Liability, Owners Equity, Revenue, and Expense Accounts

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Closing Entries and the Post-Closing Trial Balance

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Methods of Depreciation

Bad Debts

Inventory Methods

Notes Receivablenotes Payable

Filters

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

Accounts whose balances apply to one fiscal period only are called permanent accounts.

Match the terms below with the correct definitions. -The firm's excess of its current assets over its current liabilities

Liquidity is the ability to pay all current liabilities in one year.

Which of the following statements is true?

On the income statement, adding delivered cost of purchases to beginning merchandise inventory results in

Net Sales is Sales minus Sales Returns and Allowances plus Sales Discounts.

Examples of current assets are

Which statement is NOT true about the Chart of Accounts?

Purchases differ from delivered cost of purchases by the amount of

In the closing process, the Sales Returns and Allowances account is credited.

Match the terms below with the correct definitions. -Excess of gross profit over operating expenses

Match the terms below with the correct definitions. -Excess of net sales over the cost of goods sold

Which of the following are nominal accounts?

The ability of an asset to be quickly turned into cash

Assuming Net Sales is $180,000, Cost of Goods Sold is $79,000, Selling Expenses are $28,500, General Expenses are $22,800, and Interest Expense is $2,000, then Income from Operations is

Which of the following are NOT examples of General Expenses?

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

Asset, Liability, Owners Equity, Revenue, and Expense Accounts

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Closing Entries and the Post-Closing Trial Balance

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Methods of Depreciation

Bad Debts

Inventory Methods

Notes Receivablenotes Payable

Filters