Question 1
For the current fiscal year, Purchases were $245,000, Purchase Returns and Allowances were $8,600, Purchase Discounts were $2,200 and Freight In was $32,000. If the beginning merchandise inventory was $60,000 and the ending merchandise inventory was $75,000, the Cost of Goods Sold is:
Multiple Choice
$266,200
$272,800
$281,200
$251,200
Question 2
The beginning capital balance shown on a statement of owner's equity is $64,000. Net income for the period is $23,000 and the owner withdrew $30,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is
Multiple Choice
$71,000.
$64,000.
$117,000.
$57,000.
Question 3
Use the following account balances from the adjusted trial balance columns of Goody Chocolate's worksheet to answer below question.
| Account | Debit Balance | Credit Balance |
| ||||
| Cash |
| 10,000 |
|
|
|
|
|
| Merchandise Inventory |
| 4,000 |
|
|
|
|
|
| Accounts Payable |
|
|
|
| 2,200 |
|
|
| A. Goody, Drawing |
| 1,000 |
|
|
|
|
|
| A. Goody, Capital |
|
|
|
| 6,000 |
|
|
| Sales |
|
|
|
| 24,000 |
|
|
| Sales Discounts |
| 200 |
|
|
|
|
|
| Purchases |
| 12,000 |
|
|
|
|
|
| Salaries Expense |
| 7,500 |
|
|
|
|
|
| Income Summary |
| 1,500 |
|
| 4,000 |
|
|
| | |||||||
Using the adjusted trial balance above, select the correct closing entry that Goody Chocolate would make to close the expense accounts (and cost of goods sold accounts with debit balances) at the end of the accounting period.
Multiple Choice
|
|
|
|
|
|
| Income Summary |
| 19,700 |
|
|
| Expense Accounts |
|
|
| 19,700 |
| | ||||
|
|
|
|
|
|
| Income Summary |
| 2,500 |
|
|
| A. Goody, Capital |
|
|
| 2,500 |
| | ||||
|
|
|
|
|
|
| Purchases |
| 12,000 |
|
|
| Salaries Expense |
| 7,500 |
|
|
| Income Summary |
|
|
| 19,500 |
| | ||||
|
|
|
|
|
|
| Income Summary |
| 19,700 |
|
|
| Sales Discounts |
|
|
| 200 |
| Purchases |
|
|
| 12,000 |
| Salaries Expense |
|
|
| 7,500 |
Question 4
Which of the following should be classified as a General and Administrative Expense on a Multi-Step Income Statement:
Multiple Choice
Insurance Expense
Advertising Expense
Sales Salaries Expense
Delivery Expense
Question 5
Which of the following groups of accounts will have zero balances after the closing process is completed?
Multiple Choice
Allowance for Doubtful Accounts and Uncollectible Accounts Expense
Merchandise Inventory and Sales
Purchases and Purchases Returns and Allowances
Depreciation Expense and Accumulated Depreciation—Equipment
Question 6
Which of the following would not be classified as a Current Asset:
Multiple Choice
Supplies
Accounts Receivable
Cash
Equipment
Question 7
Which of the following statements is correct?
Multiple Choice
If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.
Sales less Operating Expenses equals Gross Profit.
The term single-step income statement is sometimes used to describe a classified income statement.
Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement.
Question 8
he Income Summary account, for Wise Tools appears below. Based on the data contained in the account, determine which of the statements below is correct.
| Income Summary | |||
| 12/31 beg inv. | 4,000 | 12/31 ending inv. | 9,000 |
| 12/31 expenses | 51,000 | 12/31 revenues | 45,000 |
Multiple Choice
Wise Tools will report net income of $1,000 for the period ending 12/31
Wise Tools will report net income of $6,000 for the period ending 12/31
Wise Tools will report a $6,000 net loss for the period ending 12/31
Wise Tools will report a $1,000 net loss for the period ending 12/31
Question 9
At the end of the year Stan Still Stationery Store had the following balances: Sales $485,000; Sales Discounts $2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense $54,000. The Net Sales for the year are:
Multiple Choice
$414,180
$468,180
$447,820
$501,820
Question 10
The Income Summary account, for Edgar's Cigars appears below. Based on the data contained in the account, determine which of the statements below is correct.
| Income Summary | |||
| 12/31 beg inv. | 7,000 | 12/31 ending inv. | 3,000 |
| 12/31 expenses | 25,000 | 12/31 revenues | 36,000 |
Multiple Choice
Edgar's Cigars will report a $7,000 net loss for the period ending 12/31
Edgar's Cigars will report net income of $7,000 for the period ending 12/31
Edgar's Cigars will report an $11,000 net loss for the period ending 12/31
Edgar's Cigars will report net income of $11,000 for the period ending 12/31
Question 11
The accountant of Randy's Flooring has closed all of the temporary income statement accounts. The accountant is now ready to close the Income Summary account. The owner of the company is R. Car. Using the Income Summary T-account below, determine the correct closing entry the accountant needs to make in order to close the account.
| Income Summary | |||
| 12/31 beg inv. | 2,000 | 12/31 ending inv. | 5,000 |
| 12/31 exp. | 42,000 | 12/31 rev. | 85,000 |
Multiple Choice
|
|
|
|
|
|
| Income Summary |
| 43,000 |
|
|
| R. Car, Capital |
|
|
| 43,000 |
| | ||||
|
|
|
|
|
|
| Income Summary |
| 46,000 |
|
|
| R. Car, Capital |
|
|
| 46,000 |
| | ||||
|
|
|
|
|
|
| R. Car, Capital |
| 90,000 |
|
|
| Income Summary |
|
|
| 90,000 |
| | ||||
|
|
|
|
|
|
| R. Car, Capital |
| 46,000 |
|
|
| Income Summary |
|
|
| 46,000 |
| | ||||
Question 12
Which of the following accounts would be closed at the end of the accounting period?
Multiple Choice
Capital
Accumulated Depreciation
Prepaid Rent
Depreciation Expense
Question 13
For the current fiscal year, Purchases were $187,000, Purchase Returns and Allowances were $4,200 and Freight In was $10,500. If the beginning merchandise inventory was $98,000 and the ending merchandise inventory was $103,000, the Net Delivered Cost of Purchases is:
Multiple Choice
$172,300
$201,700
$193,300
Correct
$187,000
Question 14
In the general journal, reversing entries are dated as of
Multiple Choice
the last day of the old fiscal period.
any day during the month of the new fiscal period.
any time before the end of the fiscal period.
the first day of the new fiscal period.
Question 15
For the current fiscal year, Purchases were $187,000, Purchase Returns and Allowances were $4,200 and Freight In was $10,500. If the beginning merchandise inventory was $98,000 and the ending merchandise inventory was $103,000, the Cost of Goods Sold is:
Multiple Choice
$188,300
$193,300
$167,300
$196,700
Question 16
The entry to reverse the adjustment for accrued interest income consists of a debit to
Multiple Choice
Interest Income and a credit to Interest Expense.
Interest Income and a credit to Interest Receivable.
Interest Income and a credit to Income Summary.
Interest Receivable and a credit to Interest Income.
Question 17
Which of the following accounts will NOT appear on the post-closing trial balance?
Multiple Choice
Equipment
Wages Expense
Wages Payable
Prepaid Advertising
Question 18
Which of the following accounts is not closed at the end of the accounting period?
Multiple Choice
Accumulated Depreciation
Depreciation Expense
Sales
Interest Expense
Question 19
Use the following account balances from the adjusted trial balance columns of Goody Chocolate's worksheet to answer below question.
| Account | Debit Balance | Credit Balance |
| ||||
| Cash |
| 10,000 |
|
|
|
|
|
| Merchandise Inventory |
| 4,000 |
|
|
|
|
|
| Accounts Payable |
|
|
|
| 2,200 |
|
|
| A. Goody, Drawing |
| 1,000 |
|
|
|
|
|
| A. Goody, Capital |
|
|
|
| 6,000 |
|
|
| Sales |
|
|
|
| 24,000 |
|
|
| Sales Discounts |
| 200 |
|
|
|
|
|
| Purchases |
| 12,000 |
|
|
|
|
|
| Salaries Expense |
| 7,500 |
|
|
|
|
|
| Income Summary |
| 1,500 |
|
| 4,000 |
|
|
| | |||||||
Using the adjusted trial balance above, select the correct closing entry that Goody Chocolate would make to close their revenue accounts (and other temporary income statement accounts with credit balances) at the end of the accounting period.
Multiple Choice
|
|
|
|
|
|
| Income Summary |
| 24,200 |
|
|
| Sales |
|
|
| 24,000 |
| Sales Discounts |
|
|
| 200 |
| | ||||
|
|
|
|
|
|
| Sales |
| 24,000 |
|
|
| A. Goody, Capital |
|
|
| 24,000 |
| | ||||
|
|
|
|
|
|
| A. Goody, Capital |
| 28,000 |
|
|
| Income Summary |
|
|
| 4,000 |
| Sales |
|
|
| 24,000 |
| | ||||
|
|
|
|
|
|
| Sales |
| 24,000 |
|
|
| Income Summary |
|
|
| 24,000 |
Question 20
Prepaid expenses appear in the
Multiple Choice
Current Assets section of the balance sheet.
Operating Expenses section of the income statement.
Current Liabilities section of the balance sheet.
Other Expenses section of the income statement.
Question 21
Which of the following statements is not correct?
Multiple Choice
The gross profit percentage is calculated by dividing the gross profit for the year by the net sales for the year.
A current ratio of 3.5 to 1 means that a firm has $3.50 in current liabilities for every $1 of current assets.
Working capital is the difference between total current assets and total current liabilities.
The average inventory is calculated by adding the beginning inventory to the ending inventory and dividing the sum by 2.
Question 22
Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question.
| Account | Debit Balance | Credit Balance |
| ||||
| Cash |
| 20,500 |
|
|
|
|
|
| Merchandise Inventory |
| 1,000 |
|
|
|
|
|
| Accounts Payable |
|
|
|
| 2,800 |
|
|
| R. Holloway, Drawing |
| 500 |
|
|
|
|
|
| R. Holloway, Capital |
|
|
|
| 13,000 |
|
|
| Sales |
|
|
|
| 15,000 |
|
|
| Purchases |
| 2,000 |
|
|
|
|
|
| Purchase Returns and Allowances |
|
|
|
| 200 |
|
|
| Rent Expense |
| 3,000 |
|
|
|
|
|
| Salaries Expense |
| 4,000 |
|
|
|
|
|
| | |||||||
Select the correct closing entry that RB Auto would make to close the owner's withdrawal account at the end of the accounting period.
Multiple Choice
debit R. Holloway, Capital $500 and credit R. Holloway, Drawing for $500.
debit R. Holloway, Drawing $500 and credit Income Summary for $500.
debit Income Summary $500 and credit R. Holloway, Drawing for $500.
debit R. Holloway, Drawing $500 credit R. Holloway, Capital for $500.
Question 23
Which of the following accounts is not closed at the end of the accounting period?
Multiple Choice
Sales
Depreciation Expense
Purchases
Accounts Receivable
Question 24
Which of the following accounts will appear on the post-closing trial balance?
Multiple Choice
Medicare Tax Payable
Miscellaneous Income
Payroll Taxes Expense
Sales
Question 25
The beginning capital balance shown on a statement of owner's equity is $80,000. Net income for the period is $37,000. The owner made no additional investments during the period. The owner's capital balance at the end of the period is $96,000. The amount the owner withdrew for personal use during the period is
Multiple Choice
$21,000.
$16,000.
$80,000.
$37,000.
Question 26
Which of the following statements is not correct?
Multiple Choice
In the closing process, the balance of the owner's drawing account is transferred to the debit side of the owner's capital account.
In the closing process, the balance of the Purchases account is transferred to the Merchandise Inventory account.
The worksheet is the source of data for the general journal entries required to close the temporary accounts.
Closing the Revenue accounts is the first step in the closing process.
Question 27
Which of the following accounts is not closed at the end of the accounting period?
Multiple Choice
Sales
Purchase Discounts
Capital
Depreciation Expense
Question 28
Which of the following is not a selling expense:
Multiple Choice
Advertising Expense
Sales Salaries Expense
Delivery Expense
Rent Expense on the office
Question 29
An income statement that has one total for all revenues and one total for all expenses is known as a
Multiple Choice
multiple-step income statement.
single-step income statement.
classified income statement.
categorized income statement.
Question 30
Interest Expense is classified as a(n):
Multiple Choice
Selling Expense
Administrative Expense
Other Expense
Other Income
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