Question 1

When part of the amount of unearned revenue has been earned, the unearned revenue account must be adjusted.

Accepted Answer

A) True 
 B)False  True

Question 2

The adjusted balance of the merchandise inventory account is extended to the Balance Sheet columns of the work sheet.

Accepted Answer

A) True 
 B)False  True

Question 3

Only the debit adjustment amount in the merchandise inventory account is extended to the Adjusted Trial Balance columns of the work sheet.

Accepted Answer

A) True 
 B)False  True

Question 4

The balance of Unearned Revenue is reported on the income statement at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 5

In journalizing adjusting entries, an Unearned Revenue account is credited for any portion earned during the accounting period.

Accepted Answer

A) True 
 B)False

Question 6

On a work sheet, the amount entered in the Credit column of the Balance Sheet to balance the debits and credits is $56,000. This represents

Accepted Answer

A)  an error of $28,000 in balancing the accounts. 
B)  a net income of $56,000. 
C)  a net loss of $56,000. 
D)  accumulated depreciation and other expenses. 
A)  an error of $28,000 in balancing the accounts. 
B)  a net income of $56,000. 
C)  a net loss of $56,000. 
D)  accumulated depreciation and other expenses.

Question 7

Actually counting the goods on hand at the end of the accounting period and determining the cost of these goods by reviewing the accounting records is called

Accepted Answer

A)  the cost of goods sold. 
B)  the physical inventory. 
C)  freight-in. 
D)  accumulated depreciation. 
A)  the cost of goods sold. 
B)  the physical inventory. 
C)  freight-in. 
D)  accumulated depreciation.

Question 8

Which of the following is NOT a formal part of the accounting system?

Accepted Answer

A)  balance sheet 
B)  income statement 
C)  statement of owner's equity 
D)  the work sheet 
A)  balance sheet 
B)  income statement 
C)  statement of owner's equity 
D)  the work sheet

Question 9

Purchases Discounts is a contra-cost account.

Accepted Answer

A) True 
 B)False

Question 10

When unearned revenue is finally earned, a revenue account is debited to reflect the amount of the revenue earned.

Accepted Answer

A) True 
 B)False

Question 11

The merchandise inventory account is never debited or credited during the year using the periodic method.

Accepted Answer

A) True 
 B)False

Question 12

If beginning inventory is $30,000 and ending inventory is $35,000, the cost of the inventory on hand at the end of the accounting period is $35,000.

Accepted Answer

A) True 
 B)False

Question 13

The transaction to record unearned revenue results in an increase to an asset account.

Accepted Answer

A) True 
 B)False

Question 14

Complete the Adjustments column of the work sheet represented below. Ending merchandise inventory is $92,000.

Accepted Answer

The answer of Complete the Adjustments column of the work...

Question 15

An increase in a revenue account may reflect an increase in an asset account.

Accepted Answer

A) True 
 B)False

Question 16

Merchandise Inventory has a normal credit balance.

Accepted Answer

A) True 
 B)False

Question 17

The income summary account will always reflect the same balance as the merchandise inventory account at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 18

Some businesses require payment before delivering a product or performing a service.

Accepted Answer

A) True 
 B)False

Question 19

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to

Accepted Answer

A)  debit Purchases and credit Merchandise Inventory. 
B)  debit Merchandise Inventory and credit Sales. 
C)  debit Income Summary and credit Merchandise Inventory. 
D)  debit the Capital account and credit a revenue account. 
A)  debit Purchases and credit Merchandise Inventory. 
B)  debit Merchandise Inventory and credit Sales. 
C)  debit Income Summary and credit Merchandise Inventory. 
D)  debit the Capital account and credit a revenue account.

Question 20

A typical account found under the heading of "Revenue" in a chart of accounts is

Accepted Answer

A)  Cash. 
B)  Sales. 
C)  Freight-In. 
D)  Purchases. 
A)  Cash. 
B)  Sales. 
C)  Freight-In. 
D)  Purchases.

Exam 14: Adjustments and the Work Sheet for a Merchandising Business

When part of the amount of unearned revenue has been earned, the unearned revenue account must be adjusted.

The adjusted balance of the merchandise inventory account is extended to the Balance Sheet columns of the work sheet.

Only the debit adjustment amount in the merchandise inventory account is extended to the Adjusted Trial Balance columns of the work sheet.

The balance of Unearned Revenue is reported on the income statement at the end of the accounting period.

In journalizing adjusting entries, an Unearned Revenue account is credited for any portion earned during the accounting period.

On a work sheet, the amount entered in the Credit column of the Balance Sheet to balance the debits and credits is $56,000. This represents

Actually counting the goods on hand at the end of the accounting period and determining the cost of these goods by reviewing the accounting records is called

Which of the following is NOT a formal part of the accounting system?

Purchases Discounts is a contra-cost account.

When unearned revenue is finally earned, a revenue account is debited to reflect the amount of the revenue earned.

The merchandise inventory account is never debited or credited during the year using the periodic method.

If beginning inventory is $30,000 and ending inventory is $35,000, the cost of the inventory on hand at the end of the accounting period is $35,000.

The transaction to record unearned revenue results in an increase to an asset account.

Complete the Adjustments column of the work sheet represented below. Ending merchandise inventory is $92,000.

An increase in a revenue account may reflect an increase in an asset account.

Merchandise Inventory has a normal credit balance.

The income summary account will always reflect the same balance as the merchandise inventory account at the end of the accounting period.

Some businesses require payment before delivering a product or performing a service.

At the end of the accounting period, the correct entry in the general journal to adjust for beginning inventory is to

A typical account found under the heading of "Revenue" in a chart of accounts is

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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