Question 1

The entry to close operating expenses includes

Accepted Answer

A)  debiting Operating Expenses. 
B)  debiting Income Summary. 
C)  debiting Retained Earnings. 
D)  debiting Cost of Goods Sold. 
A)  debiting Operating Expenses. 
B)  debiting Income Summary. 
C)  debiting Retained Earnings. 
D)  debiting Cost of Goods Sold. B

Question 2

In a corporation, the stockholders' equity section contains information regarding capital stock, paid-in capital in excess of par, and retained earnings.

Accepted Answer

A) True 
 B)False  True

Question 3

With a perpetual inventory system, the movement of goods from materials to work in process to finished goods to cost of goods sold is recorded as the movement occurs.

Accepted Answer

A) True 
 B)False  True

Question 4

To record an adjustment for income tax for the period, Corporate Income Tax is debited and Income Tax Expense is credited.

Accepted Answer

A) True 
 B)False

Question 5

Source data for the beginning materials inventory comes from the

Accepted Answer

A)  materials inventory in the general ledger. 
B)  work in process inventory in the general ledger. 
C)  Adjusted Trial Balance columns of the work sheet. 
D)  Income Statement columns of the work sheet. 
A)  materials inventory in the general ledger. 
B)  work in process inventory in the general ledger. 
C)  Adjusted Trial Balance columns of the work sheet. 
D)  Income Statement columns of the work sheet.

Question 6

Both the debit and the credit balances in Factory Overhead are closed to Income Summary.

Accepted Answer

A) True 
 B)False

Question 7

Debits in the factory overhead account represent the overhead applied to production.

Accepted Answer

A) True 
 B)False

Question 8

Overapplied overhead is adjusted on the work sheet by debiting Overapplied Overhead and crediting Work in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 9

Underapplied overhead is adjusted on the work sheet by debiting Overapplied Overhead and crediting Work in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 10

Both debit and credit balances of Factory Overhead are shown in the Adjusted Trial Balance columns of the work sheet; however, neither of these amounts is extended to the Income Statement or to the Balance Sheet columns.

Accepted Answer

A) True 
 B)False

Question 11

In a perpetual inventory system, the inventory accounts reflects ending balances.

Accepted Answer

A) True 
 B)False

Question 12

The amount of uncollectible accounts is adjusted by

Accepted Answer

A)  debiting Factory Overhead and crediting Accounts Receivable. 
B)  debiting Bad Debt Expense and crediting Factory Overhead Applied. 
C)  debiting Factory Overhead and crediting Allowance for Bad Debts. 
D)  debiting Bad Debt Expense and crediting Allowance for Bad Debts. 
A)  debiting Factory Overhead and crediting Accounts Receivable. 
B)  debiting Bad Debt Expense and crediting Factory Overhead Applied. 
C)  debiting Factory Overhead and crediting Allowance for Bad Debts. 
D)  debiting Bad Debt Expense and crediting Allowance for Bad Debts.

Question 13

The amount of interest due on notes and bonds payable owed by the company is adjusted on the work sheet by debiting Interest Expense and crediting Accrued Interest Payable.

Accepted Answer

A) True 
 B)False

Question 14

A manufacturing company's work sheet includes three inventory accounts.

Accepted Answer

A) True 
 B)False

Question 15

Source data for the work in process inventory as of the end of the accounting period comes from the

Accepted Answer

A)  materials inventory in the general ledger. 
B)  work in process inventory in the general ledger. 
C)  Balance Sheet columns of the work sheet. 
D)  Income Statement columns of the work sheet. 
A)  materials inventory in the general ledger. 
B)  work in process inventory in the general ledger. 
C)  Balance Sheet columns of the work sheet. 
D)  Income Statement columns of the work sheet.

Question 16

The amount of expired factory equipment insurance is adjusted on the work sheet by debiting Equipment Insurance Expense.

Accepted Answer

A) True 
 B)False

Question 17

The entry to close Cost of Goods Sold includes

Accepted Answer

A)  debiting Income summary and crediting Cost of Goods Sold. 
B)  debiting Cost of Goods Sold and crediting Income Summary. 
C)  debiting Retained Earnings and crediting Cost of Goods Sold. 
D)  debiting Cost of Goods Sold and crediting Retained Earnings. 
A)  debiting Income summary and crediting Cost of Goods Sold. 
B)  debiting Cost of Goods Sold and crediting Income Summary. 
C)  debiting Retained Earnings and crediting Cost of Goods Sold. 
D)  debiting Cost of Goods Sold and crediting Retained Earnings.

Question 18

To close operating expenses at the end of the year, Income Summary is credited.

Accepted Answer

A) True 
 B)False

Question 19

If factory overhead applied is more than the adjusted debit balance of Factory Overhead, the difference is known as underapplied overhead.

Accepted Answer

A) True 
 B)False

Question 20

The entry to close Cost of Goods Sold at the end of the year includes a debit to Income Summary.

Accepted Answer

A) True 
 B)False

Exam 27: Manufacturing Accounting: The Work Sheet and Financial Statements

The entry to close operating expenses includes

In a corporation, the stockholders' equity section contains information regarding capital stock, paid-in capital in excess of par, and retained earnings.

With a perpetual inventory system, the movement of goods from materials to work in process to finished goods to cost of goods sold is recorded as the movement occurs.

To record an adjustment for income tax for the period, Corporate Income Tax is debited and Income Tax Expense is credited.

Source data for the beginning materials inventory comes from the

Both the debit and the credit balances in Factory Overhead are closed to Income Summary.

Debits in the factory overhead account represent the overhead applied to production.

Overapplied overhead is adjusted on the work sheet by debiting Overapplied Overhead and crediting Work in Process Inventory.

Underapplied overhead is adjusted on the work sheet by debiting Overapplied Overhead and crediting Work in Process Inventory.

Both debit and credit balances of Factory Overhead are shown in the Adjusted Trial Balance columns of the work sheet; however, neither of these amounts is extended to the Income Statement or to the Balance Sheet columns.

In a perpetual inventory system, the inventory accounts reflects ending balances.

The amount of uncollectible accounts is adjusted by

The amount of interest due on notes and bonds payable owed by the company is adjusted on the work sheet by debiting Interest Expense and crediting Accrued Interest Payable.

A manufacturing company's work sheet includes three inventory accounts.

Source data for the work in process inventory as of the end of the accounting period comes from the

The amount of expired factory equipment insurance is adjusted on the work sheet by debiting Equipment Insurance Expense.

The entry to close Cost of Goods Sold includes

To close operating expenses at the end of the year, Income Summary is credited.

If factory overhead applied is more than the adjusted debit balance of Factory Overhead, the difference is known as underapplied overhead.

The entry to close Cost of Goods Sold at the end of the year includes a debit to Income Summary.

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

Adjustments and the Work Sheet for a Merchandising Business

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

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