Question 1

The ending merchandise inventory was overstated. This error would cause:

Accepted Answer

A)   net income to be understated.
B)   revenue to be understated.
C)   net income to be overstated.
D)   Cost of Goods Sold to be overstated.E) C) and D)
F) B) and C)

Question 2

In the process of closing entries, the Income Summary account is closed to the Capital account before Withdrawals.

Accepted Answer

A) True 
 B)False

Question 3

In what category in a classified balance sheet is Mortgage Payable found?

Accepted Answer

A)   Plant and Equipment
B)   Current Liabilities
C)   Long-term Liabilities
D)   Both B and C are correct.E) A) and B)
F) A) and C)

Question 4

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).
-

Accepted Answer

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

Question 5

Johnson Supplies has $530,000 in net sales and $300,000 in gross profit. Cost of Goods Sold equals:

Accepted Answer

A)   $830,000.
B)   $300,000.
C)   $230,000.
D)   None of these is correct.E) All of the above
F) A) and C)

Question 6

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).
-

Accepted Answer

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

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).
-

Accepted Answer

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

Question 8

Prepare closing entries from the following information on the Warner Books worksheet income statement columns. Additional information: Withdrawals equal $25 for the period.

Accepted Answer

The answer of Prepare closing entries from the following information...

Question 9

Reversing entries are recorded on the third day of the new accounting period.

Accepted Answer

A) True 
 B)False

Question 10

Determine the beginning inventory of a business having:
Beginning Capital balance of $11,000
No additional investments or withdrawals
Net sales of $43,500
Net purchases $26,000
Ending inventory of $4,250
Ending Capital balance of $10,000
Operating expenses of $16,500
$ ________

Accepted Answer

The answer of Determine the beginning inventory of a business...

Question 11

The amount found in the Income Statement debit column on the worksheet for Income Summary is the:

Accepted Answer

A)   total amount of expenses.
B)   total amount of revenues.
C)   beginning inventory.
D)   ending inventory.E) B) and C)
F) All of the above

Question 12

The calculation of Net Purchases does NOT include:

Accepted Answer

A)   Purchases Returns and Allowances.
B)   Purchases Discounts.
C)   Purchases.
D)   Merchandise Inventory.E) B) and C)
F) A) and D)

Question 13

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).
-

Accepted Answer

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

Question 14

The excess of net revenue over the cost of goods sold is called:

Accepted Answer

A)   operating profit.
B)   net loss.
C)   merchandising income.
D)   gross profit.E) A) and B)
F) B) and D)

Question 15

Net Sales + Sales Discounts + Sales Returns and Allowances equals:

Accepted Answer

A)   Net Income.
B)   Gross Sales.
C)   Net Income from Operations.
D)   None of the aboveE) C) and D)
F) A) and B)

Question 16

To determine how much merchandise a company has returned to its vendors, it should review the:

Accepted Answer

A)   Purchases Returns & Allowances account.
B)   Change in the Inventory balance.
C)   Sales Returns & Allowances account.
D)   Sales Discounts account.E) A) and C)
F) B) and C)

Question 17

Determine the ending inventory of a business having:
Beginning Capital $6,000
Net sales of $60,000
Net purchases of $31,000
Freight-in of $2,000
Beginning inventory of $4,000
Ending Capital of $21,000
Operating expenses of $10,000
No additional investments or withdrawals.
$ ________

Accepted Answer

The answer of Determine the ending inventory of a business...

Question 18

The entry to close the Withdrawal account was entered in reverse-the Withdrawal account was debited and Capital credited. This error would cause:

Accepted Answer

A)   the income summary account to have a debit balance.
B)   net income to be overstated.
C)   net income to be understated.
D)   Withdrawals to be overstated.E) A) and C)
F) C) and D)

Question 19

After the closing process, the permanent accounts are set back to zero.

Accepted Answer

A) True 
 B)False

Question 20

Closing entries:

Accepted Answer

A)   are posted to the general ledger.
B)   are done to update Cash.
C)   can be done before adjusting entries.
D)   are done to update the balance sheet.E) None of the above
F) All of the above

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

In the process of closing entries, the Income Summary account is closed to the Capital account before Withdrawals.

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The amount found in the Income Statement debit column on the worksheet for Income Summary is the:

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Closing entries:

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The ending merchandise inventory was overstated. This error would cause:

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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). -

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The excess of net revenue over the cost of goods sold is called:

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Determine the beginning inventory of a business having: Beginning Capital balance of $11,000 No additional investments or withdrawals Net sales of $43,500 Net purchases $26,000 Ending inventory of $4,250 Ending Capital balance of $10,000 Operating expenses of $16,500 $ ________

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Johnson Supplies has $530,000 in net sales and $300,000 in gross profit. Cost of Goods Sold equals:

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After the closing process, the permanent accounts are set back to zero.

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Prepare closing entries from the following information on the Warner Books worksheet income statement columns. Additional information: Withdrawals equal $25 for the period.

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The entry to close the Withdrawal account was entered in reverse-the Withdrawal account was debited and Capital credited. This error would cause:

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Net Sales + Sales Discounts + Sales Returns and Allowances equals:

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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). -

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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). -

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Reversing entries are recorded on the third day of the new accounting period.

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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). -

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The calculation of Net Purchases does NOT include:

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Determine the ending inventory of a business having: Beginning Capital $6,000 Net sales of $60,000 Net purchases of $31,000 Freight-in of $2,000 Beginning inventory of $4,000 Ending Capital of $21,000 Operating expenses of $10,000 No additional investments or withdrawals. $ ________

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In what category in a classified balance sheet is Mortgage Payable found?

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To determine how much merchandise a company has returned to its vendors, it should review the:

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