Question 1

Net Income equals:

Accepted Answer

A) Net Sales - Cost of goods sold - Operating expenses. 
B) Gross Profit - Operating expenses. 
C) Sales - Sales Returns & Allowances - Sales Discount - Cost of goods sold - Operating Expenses. 
D) All of the above are correct. 
A) Net Sales - Cost of goods sold - Operating expenses. 
B) Gross Profit - Operating expenses. 
C) Sales - Sales Returns & Allowances - Sales Discount - Cost of goods sold - Operating Expenses. 
D) All of the above are correct.

Question 2

Rental Income is what type of account?

Accepted Answer

A) Asset 
B) Revenue 
C) Expense 
D) Liability 
A) Asset 
B) Revenue 
C) Expense 
D) Liability

Question 3

Max Realty paid $3,000 rent on a building in advance for two years on May 1.The amount that should be recorded as rent expense as of December 31 is:

Accepted Answer

A) $1,000. 
B) $3,000. 
C) $1,500. 
D) $875. 
A) $1,000. 
B) $3,000. 
C) $1,500. 
D) $875.

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

Accepted Answer

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

Question 5

Owner's Capital would be found on the worksheet in the:

Accepted Answer

A) income statement debit column. 
B) income statement credit column. 
C) balance sheet debit column. 
D) balance sheet credit column. 
A) income statement debit column. 
B) income statement credit column. 
C) balance sheet debit column. 
D) balance sheet credit column.

Question 6

The trial balance columns on the worksheet are populated using the:

Accepted Answer

A) general journal. 
B) general ledger. 
C) subsidiary ledger. 
D) None of the above 
A) general journal. 
B) general ledger. 
C) subsidiary ledger. 
D) None of the above

Question 7

The adjustment for accrued wages was NOT done;this would cause:

Accepted Answer

A) liabilities to be overstated. 
B) liabilities to be understated. 
C) capital to be understated. 
D) net income to be understated. 
A) liabilities to be overstated. 
B) liabilities to be understated. 
C) capital to be understated. 
D) net income to be understated.

Question 8

Beginning inventory is adjusted by crediting Merchandise Inventory and debiting Income Summary.

Accepted Answer

A) True 
 B)False

Question 9

The financial statement on which Rental Income would appear is the:

Accepted Answer

A) income statement. 
B) owner's equity statement. 
C) balance sheet. 
D) trial balance. 
A) income statement. 
B) owner's equity statement. 
C) balance sheet. 
D) trial balance.

Question 10

The adjustment for depreciation expense was omitted;this would:

Accepted Answer

A) overstate the period's expenses and overstate the period end liabilities. 
B) overstate the period's expenses and understate the period end liabilities. 
C) understate the period's expenses and overstate the period's assets. 
D) understate the period's expenses and understate the period's assets. 
A) overstate the period's expenses and overstate the period end liabilities. 
B) overstate the period's expenses and understate the period end liabilities. 
C) understate the period's expenses and overstate the period's assets. 
D) understate the period's expenses and understate the period's assets.

Question 11

Beginning and ending inventories are $900 and $800,respectively.The income statement debit and credit columns of the worksheet total $2,500 and $2,500,respectively,not including the adjustment amounts for beginning and ending inventories.The net income or loss for the period is:

Accepted Answer

A) $150 net income. 
B) $150 net loss. 
C) $100 net income. 
D) $100 net loss. 
A) $150 net income. 
B) $150 net loss. 
C) $100 net income. 
D) $100 net loss.

Question 12

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

Accepted Answer

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

Question 13

Calculate: (a)net sales, (b)cost of goods sold, (c)gross profit,and (d)net income from the following:
 $$\begin{array} { l r l r } 
\text { Sales } & \$ 2,000 & \text { Beginning Inventory } & \$ 500 \
\text { Sales Discount } & 50 & \text { Net purchases } & 1,200 \
\text { Sales Returns \& } & & \text { Ending Inventory } & 700 \
\text { Allowances } & 80 & \text { Operating Expenses } & 300
\end{array}$$

Accepted Answer

a)$1,870
b

Question 14

Discuss the reasons a company would consider using a periodic inventory system.

Accepted Answer

Companies selling a variety of merchandi

Question 15

Mortgage Payable is a contra-liability account.

Accepted Answer

A) True 
 B)False

Question 16

Cost of Goods Sold equals:

Accepted Answer

A) Beginning Inventory + Net Purchases + Freight-in + Freight-out + Ending Inventory. 
B) Beginning Inventory - Net Purchases - Freight-in + Ending Inventory. 
C) Beginning Inventory + Net Purchases + Freight-in - Ending Inventory. 
D) Beginning Inventory - Net Purchases + Freight-in + Ending Inventory. 
A) Beginning Inventory + Net Purchases + Freight-in + Freight-out + Ending Inventory. 
B) Beginning Inventory - Net Purchases - Freight-in + Ending Inventory. 
C) Beginning Inventory + Net Purchases + Freight-in - Ending Inventory. 
D) Beginning Inventory - Net Purchases + Freight-in + Ending Inventory.

Question 17

Under the periodic inventory method,indicate the financial statement(s)on which you would find the following items:
a)Cost of goods sold
b)Freight-In
c)Ending Inventory
d)Beginning Inventory
e)Sales Discount

Accepted Answer

a)Income Statement
b)Income St

Question 18

The balance sheet columns on the worksheet prepared for Cleveland Foods had subtotals as follows: debit column,$13,000,and credit column,$10,400.This information indicates that:

Accepted Answer

A) the company incurred a net income of $2,600. 
B) the company incurred a net loss of $2,600. 
C) an error was made when preparing the adjustments in the worksheet. 
D) the unadjusted trial balance has an error. 
A) the company incurred a net income of $2,600. 
B) the company incurred a net loss of $2,600. 
C) an error was made when preparing the adjustments in the worksheet. 
D) the unadjusted trial balance has an error.

Question 19

The perpetual inventory method is:

Accepted Answer

A) used by companies with a variety of merchandise with low unit prices. 
B) used by companies with low amounts of inventory. 
C) not used by many companies today. 
D) does not ever require a physical inventory. 
A) used by companies with a variety of merchandise with low unit prices. 
B) used by companies with low amounts of inventory. 
C) not used by many companies today. 
D) does not ever require a physical inventory.

Question 20

In the perpetual inventory system,it is not necessary to take a physical inventory at the end of the period.

Accepted Answer

A) True 
 B)False

Exam 11: Preparing a Worksheet for a Merchandise Company

Net Income equals:

Rental Income is what type of account?

Max Realty paid $3,000 rent on a building in advance for two years on May 1.The amount that should be recorded as rent expense as of December 31 is:

Owner's Capital would be found on the worksheet in the:

The trial balance columns on the worksheet are populated using the:

The adjustment for accrued wages was NOT done;this would cause:

Beginning inventory is adjusted by crediting Merchandise Inventory and debiting Income Summary.

The financial statement on which Rental Income would appear is the:

The adjustment for depreciation expense was omitted;this would:

Beginning and ending inventories are $900 and $800,respectively.The income statement debit and credit columns of the worksheet total $2,500 and $2,500,respectively,not including the adjustment amounts for beginning and ending inventories.The net income or loss for the period is:

Calculate: (a)net sales, (b)cost of goods sold, (c)gross profit,and (d)net income from the following: Sales \ 2,000 Beginning Inventory \ 500 Sales Discount 50 Net purchases 1,200 Sales Returns \& Ending Inventory 700 Allowances 80 Operating Expenses 300

Discuss the reasons a company would consider using a periodic inventory system.

Mortgage Payable is a contra-liability account.

Cost of Goods Sold equals:

Under the periodic inventory method,indicate the financial statement(s)on which you would find the following items: a)Cost of goods sold b)Freight-In c)Ending Inventory d)Beginning Inventory e)Sales Discount

The balance sheet columns on the worksheet prepared for Cleveland Foods had subtotals as follows: debit column,$13,000,and credit column,$10,400.This information indicates that:

The perpetual inventory method is:

In the perpetual inventory system,it is not necessary to take a physical inventory at the end of the period.

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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