Question 1

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

Accepted Answer

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

Question 2

The first step in the closing process is to:

Accepted Answer

A)  close all balances on the income statement debit column of the worksheet except Income Summary.
B)  transfer the balance from the Income Summary Account to the Capital Account.
C)  close all balances on the income statement credit column of the worksheet except Income Summary.
D)  transfer the balance of the Owner's Withdrawals Account to Capital. C

Question 3

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

Accepted Answer

A)  Purchases Returns and Allowances Account.
B)  Purchases Discount Account.
C)  Sales Returns and Allowances Account.
D)  Freight-In. C

Question 4

The post-closing trial balance would include Sales and Purchases.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Sales } & & & & \
\hline
\end{array}$

Accepted Answer

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

Question 8

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 9

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.

Question 10

The adjusting entry to record rental income that is earned would be a debit to Rental Income and a credit to Unearned Rent.

Accepted Answer

A) True 
 B)False

Question 11

The entry to adjust salaries was done twice.This error would cause:

Accepted Answer

A)  liabilities to be understated.
B)  liabilities to be overstated.
C)  expenses to be understated.
D)  Capital to be overstated.

Question 12

Which of the following is not an operating expense?

Accepted Answer

A)  Payroll Tax Expense
B)  Freight-in
C)  Supplies Expense
D)  Salaries Expense

Question 13

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.

Question 14

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

Question 15

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:

Accepted Answer

A)  assets to be overstated.
B)  liabilities to be overstated.
C)  Capital account to be understated.
D)  Capital account to be overstated.

Question 16

The post-closing trial balance is prepared from:

Accepted Answer

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

Question 17

The amount shown in the balance sheet debit column of worksheet for Merchandise Inventory is:

Accepted Answer

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

Question 18

If Net Sales is $8,000,Cost of Goods Sold is $3,000,Gross Profit is $5,000 and Operating Expenses are $1,000,what is the Net Income from Operations?

Accepted Answer

A)  $2,000
B)  $4,000
C)  $1,000
D)  $3,000

Question 19

Plant and Equipment is usually listed:

Accepted Answer

A)  in alphabetical order.
B)  in order of liquidity.
C)  by how long they will last.
D)  dollar value.

Question 20

Reversing entries occur at the beginning of the accounting period and:

Accepted Answer

A)  help to reduce potential errors.
B)  simplify the bookkeeping associated with accruals from the prior period.
C)  reverse the adjusting entries.
D)  All of the above are correct.

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

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

The first step in the closing process is to:

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

The post-closing trial balance would include Sales and Purchases.

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

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

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 $ ________

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

The adjusting entry to record rental income that is earned would be a debit to Rental Income and a credit to Unearned Rent.

The entry to adjust salaries was done twice.This error would cause:

Which of the following is not an operating expense?

Freight-in is:

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

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:

The post-closing trial balance is prepared from:

The amount shown in the balance sheet debit column of worksheet for Merchandise Inventory is:

If Net Sales is $8,000,Cost of Goods Sold is $3,000,Gross Profit is $5,000 and Operating Expenses are $1,000,what is the Net Income from Operations?

Plant and Equipment is usually listed:

Reversing entries occur at the beginning of the accounting period and: