Exam 11: Preparing a Worksheet for a Merchandise Company

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). - Column 1 Column 2 Column 3 Sales discounts

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

Since adjustments are listed on the worksheet,there is no need to record the entries in the general journal.

The normal balance for Unearned Rent is:

The income statement columns on a worksheet have subtotals as follows: debit column,$10,500,and credit column,$9,000.This indicates that:

As supplies are used,they become:

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). - Column 1 Column 2 Column 3 Sales returns and allowances

On the worksheet,the Beginning Inventory account is found on the Balance Sheet and Income Statement columns.

Mortgage Payable is found on the income statement.

Mortgage Payable is an expense account.

Camping is Fun purchased merchandise costing $2,000.Calculate the cost of goods sold under the following different situations: a)Beginning inventory $200 and no ending inventory. b)Beginning inventory $250 and a $300 ending inventory. c)No beginning inventory and a $150 ending inventory.

Under the accrual system,expenses are recorded when incurred.

The beginning inventory is assumed to be sold; therefore,it is added to cost of goods sold.

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). - Column 1 Column 2 Column 3 Prepaid subscription

The adjustment for unearned rent is recorded when:

Unearned Rent results because:

If ending inventory is overstated this period,beginning inventory will be overstated in the next period.

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). - Column 1 Column 2 Column 3 Merchandise inventory - ending

The perpetual inventory method is:

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