Question 1

When the adjustment is made for depreciation,both the Depreciation Expense account and Accumulated Depreciation account are increased.

Accepted Answer

A) True 
 B)False

Question 2

Sales Discount is used when calculating Net Purchases.

Accepted Answer

A) True 
 B)False

Question 3

On the worksheet the ending Merchandise Inventory account appears in the:

Accepted Answer

A) adjusted trial balance and trial balance columns. 
B) adjustment column. 
C) adjustment,trial balance,and income statement columns. 
D) adjustment,adjusted trial balance,and balance sheet columns. 
A) adjusted trial balance and trial balance columns. 
B) adjustment column. 
C) adjustment,trial balance,and income statement columns. 
D) adjustment,adjusted trial balance,and balance sheet columns.

Question 4

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none).
-$$\begin{array} { | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \
\hline \text { Sales discounts } & & & \
\hline
\end{array}$$

Accepted Answer

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

Question 5

Doug paid $1,200 on a one-year insurance policy on March 1.The entry included a debit to Prepaid Insurance.The adjusting entry on December 31 would include a:

Accepted Answer

A) debit to Prepaid Insurance for $1,000;and a credit to Cash for $1,000. 
B) debit to Insurance Expense for $1,000;and a credit to Prepaid Insurance for $1,000. 
C) debit to Insurance Expense for $1,200;and a credit to Prepaid Insurance for $1,200. 
D) debit to Cash for $1,200;and a credit to Prepaid Insurance for $1,200. 
A) debit to Prepaid Insurance for $1,000;and a credit to Cash for $1,000. 
B) debit to Insurance Expense for $1,000;and a credit to Prepaid Insurance for $1,000. 
C) debit to Insurance Expense for $1,200;and a credit to Prepaid Insurance for $1,200. 
D) debit to Cash for $1,200;and a credit to Prepaid Insurance for $1,200.

Question 6

Max received $6,000 in advance for renting part of his building.What is the entry to record the receipt of payment?

Accepted Answer

A) Debit Cash;credit Rent Expense 
B) Debit Cash;credit Prepaid Rent Expense 
C) Debit Cash;credit Unearned Rent Revenue 
D) Debit Cash;credit Rental Income 
A) Debit Cash;credit Rent Expense 
B) Debit Cash;credit Prepaid Rent Expense 
C) Debit Cash;credit Unearned Rent Revenue 
D) Debit Cash;credit Rental Income

Question 7

The adjusted trial balance represents the combination of the unadjusted trial balance and the adjustments columns.

Accepted Answer

A) True 
 B)False

Question 8

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none).
-$$\begin{array} { | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \
\hline \text { Supplies expense } & & & \
\hline
\end{array}$$

Accepted Answer

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

Question 9

When completing a worksheet:

Accepted Answer

A) the ending inventory amount appears in the income statement debit column. 
B) the beginning inventory amount appears in the adjustment credit column. 
C) the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet. 
D) the beginning inventory amount appears in the balance sheet debit column of the worksheet. 
A) the ending inventory amount appears in the income statement debit column. 
B) the beginning inventory amount appears in the adjustment credit column. 
C) the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet. 
D) the beginning inventory amount appears in the balance sheet debit column of the worksheet.

Question 10

Use the following information to complete the partial worksheet for Bill's Company.Record the appropriate adjusting entries using the data below and extend the balances over to the adjusted trial balance columns.
 $\begin{array}{lr}
\text { Merchand ise inventory-ending } & \$ 10 \
\text { Store supplies on hand } & 3 \
\text { Depreciation on store equipment } & 2 \
\text { Accrued salaries } & 1
\end{array}$

Accepted Answer

The answer of Use the following information to complete the...

Question 11

On the worksheet the beginning Merchandise Inventory account appears in:

Accepted Answer

A) the adjustment column. 
B) the trial balance and the balance sheet columns. 
C) the trial balance and adjustment columns. 
D) All of these answers are correct. 
A) the adjustment column. 
B) the trial balance and the balance sheet columns. 
C) the trial balance and adjustment columns. 
D) All of these answers are correct.

Question 12

Calculate: (a)net sales, (b)cost of goods sold, (c)gross profit,and (d)net income from the following:
 $$\begin{array} { l r l r } 
\text { Sales } & \$ 1,300 & \text { Beginning Inventory } & \$ 11 \
\text { Sales Discount } & 5 & \text { Net purchases } & 1,050 \
\text { Sales Returns \& } & & \text { Ending Inventory } & 16 \
\text { Allowances } & 15 & \text { Operating Expenses } & 100
\end{array}$$

Accepted Answer

a)$1,280
b

Question 13

The income summary amounts in the income statement columns of the worksheet represent:

Accepted Answer

A) income for the period. 
B) adjustment for unearned revenue. 
C) closing of the Capital account. 
D) beginning and ending inventory. 
A) income for the period. 
B) adjustment for unearned revenue. 
C) closing of the Capital account. 
D) beginning and ending inventory.

Question 14

Freight-in:

Accepted Answer

A) adds to the Cost of Goods Sold. 
B) reduces the Cost of Goods Sold. 
C) does not affect Cost of Goods Sold. 
D) increases operating expenses. 
A) adds to the Cost of Goods Sold. 
B) reduces the Cost of Goods Sold. 
C) does not affect Cost of Goods Sold. 
D) increases operating expenses.

Question 15

Interest Expense is:

Accepted Answer

A) a cost of borrowing money. 
B) included in the "Other Expenses" on the income statement. 
C) has a normal debit balance. 
D) All of the above are correct. 
A) a cost of borrowing money. 
B) included in the "Other Expenses" on the income statement. 
C) has a normal debit balance. 
D) All of the above are correct.

Question 16

An account never used in an adjusting entry is:

Accepted Answer

A) Consulting Fees-Revenue. 
B) Interest Payable. 
C) Equipment. 
D) Accumulated Depreciation - Equipment. 
A) Consulting Fees-Revenue. 
B) Interest Payable. 
C) Equipment. 
D) Accumulated Depreciation - Equipment.

Question 17

Gross profit less operating expenses equals:

Accepted Answer

A) Cost of Goods Sold. 
B) net sales. 
C) net purchases. 
D) net income. 
A) Cost of Goods Sold. 
B) net sales. 
C) net purchases. 
D) net income.

Question 18

On November 1,Phone Center received $4,800 for two years' rent in advance from Garrison Company.The November 30 adjusting entry that Phone Center should make is to:

Accepted Answer

A) debit Rental Income;credit Unearned Rent $3,000. 
B) debit Cash;credit Rental Income $3,000. 
C) debit Unearned Rent;credit Rental Income $200. 
D) debit Unearned Rent;credit Rent Expense $200. 
A) debit Rental Income;credit Unearned Rent $3,000. 
B) debit Cash;credit Rental Income $3,000. 
C) debit Unearned Rent;credit Rental Income $200. 
D) debit Unearned Rent;credit Rent Expense $200.

Question 19

The normal balance of Income Summary is:

Accepted Answer

A) debit. 
B) credit. 
C) The account does not have a normal balance. 
D) It depends on the change of the inventory balance. 
A) debit. 
B) credit. 
C) The account does not have a normal balance. 
D) It depends on the change of the inventory balance.

Question 20

The first entry to adjust Merchandise Inventory includes:

Accepted Answer

A) a debit to Merchandise Inventory. 
B) a credit to Merchandise Inventory. 
C) a credit to Income Summary. 
D) a credit to purchases. 
A) a debit to Merchandise Inventory. 
B) a credit to Merchandise Inventory. 
C) a credit to Income Summary. 
D) a credit to purchases.

Exam 11: Preparing a Worksheet for a Merchandise Company

When the adjustment is made for depreciation,both the Depreciation Expense account and Accumulated Depreciation account are increased.

Sales Discount is used when calculating Net Purchases.

On the worksheet the ending Merchandise Inventory account appears in the:

Doug paid $1,200 on a one-year insurance policy on March 1.The entry included a debit to Prepaid Insurance.The adjusting entry on December 31 would include a:

Max received $6,000 in advance for renting part of his building.What is the entry to record the receipt of payment?

The adjusted trial balance represents the combination of the unadjusted trial balance and the adjustments columns.

When completing a worksheet:

On the worksheet the beginning Merchandise Inventory account appears in:

Calculate: (a)net sales, (b)cost of goods sold, (c)gross profit,and (d)net income from the following: Sales \ 1,300 Beginning Inventory \ 11 Sales Discount 5 Net purchases 1,050 Sales Returns \& Ending Inventory 16 Allowances 15 Operating Expenses 100

The income summary amounts in the income statement columns of the worksheet represent:

Freight-in:

Interest Expense is:

An account never used in an adjusting entry is:

Gross profit less operating expenses equals:

On November 1,Phone Center received $4,800 for two years' rent in advance from Garrison Company.The November 30 adjusting entry that Phone Center should make is to:

The normal balance of Income Summary is:

The first entry to adjust Merchandise Inventory includes:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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