Question 1

A partial work sheet for Carman and Company is presented below. The merchandise inventory at the beginning of the year was $46,700. D. E. Carman, the owner, withdrew $33,500 during the year. The fiscal year ends on July 31 of this year.
Instructions:
  
1.
Prepare an income statement.
2.
Journalize the closing entries.

Accepted Answer

The answer of A partial work sheet for Carman and...

Question 2

Net sales of Clean Spectacles is $90,000, cost of goods sold is $54,000, selling expenses are $17,000, and general expenses are $12,500. Which of the following is its gross profit?

Accepted Answer

A)  $19,000 
B)  $173,500 
C)  $36,000 
D)  $83,500 
E)  $6,500

Question 3

Reversing entries are journalized and posted before adjusting and closing entries are journalized and posted.

Accepted Answer

A) True 
 B)False

Question 4

The Sales Discounts account is shown with the Other Expenses on the income statement.

Accepted Answer

A) True 
 B)False

Question 5

Immediately after a reversing entry to reverse the entry for accrued salaries has been posted, Salary Expense will have a credit balance.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following accounts has a debit balance and is closed into Income Summary in the closing entries of a merchandising business?

Accepted Answer

A)  Purchase Discounts 
B)  Drawings 
C)  Capital 
D)  Wages Expense 
E)  Interest Income

Question 7

On an income statement, Interest Expense is shown as an Operating Expense.

Accepted Answer

A) True 
 B)False

Question 8

If Ending Merchandise Inventory is $22,000, Purchases are $85,000, Purchases Discounts are $1,800, Freight In is $3,500, and Beginning Merchandise Inventory is $28,000, then Cost of Goods Sold is

Accepted Answer

A)  $80,700. 
B)  $90,300. 
C)  $79,700. 
D)  $92,700. 
E)  $107,000.

Question 9

Net income is the final figure after all expenses have been deducted from revenues on a(n):

Accepted Answer

A)  income statement. 
B)  statement of owner's equity. 
C)  balance sheet. 
D)  statement of cash flows.

Question 10

Inventory would appear on a balance sheet as

Accepted Answer

A)  a current asset. 
B)  part of property and equipment. 
C)  a current liability. 
D)  a long-term liability. 
E)  either a current asset or a current liability.

Question 11

Which of the following are NOT examples of selling expenses

Accepted Answer

A)  Sales Salary Expense 
B)  Advertising Expense 
C)  Delivery Expense 
D)  Insurance Expense

Question 12

Match the terms below with the correct definitions.
-Once-a-year accounting entries recorded on the first day of the fiscal period

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

Question 13

Which of the following statements is NOT true about closing entries for a merchandising business?

Accepted Answer

A)  The closing entries for a merchandise business have a different closing order than a service business. 
B)  Nominal Accounts are closed at the end of the fiscal period. 
C)  Temporary-equity accounts are closed at the end of the fiscal period. 
D)  None of the above are true.

Question 14

Match the terms below with the correct definitions.
-The classification that helps to identify which of the firm's debts are paid over a comparatively long period

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

Question 15

Match the terms below with the correct definitions.
-Long-lived assets

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

Question 16

Income from Operations

Accepted Answer

A)  = Net Sales - COGS - Operating Expenses 
B)  = Net Sales + COGS - Operating Expenses 
C)  = Net Sales + COGS + Operating Expenses 
D)  None of the above

Question 17

Write the skeleton of an income statement from Sales through Net Income.

Accepted Answer

The answer of Write the skeleton of an income statement...

Question 18

Which of the following would be an appropriate account number for Selling Expenses?

Accepted Answer

A)  11 
B)  21 
C)  41 
D)  61

Question 19

What would the current ratio be if a company had the following financial information: Current Assets, $150,000; Current Liabilities, $75,000; Total Assets $350,000. Round to one decimal places?

Accepted Answer

A)  4.7 
B)  2 
C)  6.6 
D)  None of the above

Question 20

A relatively long-lived asset that is held for use in the production or sale of other assets or services

Accepted Answer

A)  Current Asset 
B)  Note Receivable (Current) 
C)  Accounts Receivable 
D)  Property and Equipment

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

Net sales of Clean Spectacles is $90,000, cost of goods sold is $54,000, selling expenses are $17,000, and general expenses are $12,500. Which of the following is its gross profit?

Reversing entries are journalized and posted before adjusting and closing entries are journalized and posted.

The Sales Discounts account is shown with the Other Expenses on the income statement.

Immediately after a reversing entry to reverse the entry for accrued salaries has been posted, Salary Expense will have a credit balance.

Which of the following accounts has a debit balance and is closed into Income Summary in the closing entries of a merchandising business?

On an income statement, Interest Expense is shown as an Operating Expense.

If Ending Merchandise Inventory is $22,000, Purchases are $85,000, Purchases Discounts are $1,800, Freight In is $3,500, and Beginning Merchandise Inventory is $28,000, then Cost of Goods Sold is

Net income is the final figure after all expenses have been deducted from revenues on a(n) :

Inventory would appear on a balance sheet as

Which of the following are NOT examples of selling expenses

Match the terms below with the correct definitions. -Once-a-year accounting entries recorded on the first day of the fiscal period

Which of the following statements is NOT true about closing entries for a merchandising business?

Match the terms below with the correct definitions. -The classification that helps to identify which of the firm's debts are paid over a comparatively long period

Match the terms below with the correct definitions. -Long-lived assets

Income from Operations

Write the skeleton of an income statement from Sales through Net Income.

Which of the following would be an appropriate account number for Selling Expenses?

What would the current ratio be if a company had the following financial information: Current Assets, $150,000; Current Liabilities, $75,000; Total Assets $350,000. Round to one decimal places?

A relatively long-lived asset that is held for use in the production or sale of other assets or services