 |
| 1 | |
Under a periodic system, entries are recorded in the Merchandise Inventory account at the end of the fiscal period only. |
| | A) | True |
| | B) | False |
|
|
|
| 2 | |
In the Income Statement columns of the work sheet, Income Summary is shown as the balance of the two amounts in the Adjustments column. |
| | A) | True |
| | B) | False |
|
|
|
| 3 | |
If the Income Summary has a debit of $60,000 and a credit of $65,000 after adjusting entries have been journalized and posted, $60,000 represents the ending inventory. |
| | A) | True |
| | B) | False |
|
|
|
| 4 | |
In the Income Summary account, the total of all expenses are recorded on the debit side of the T-account. |
| | A) | True |
| | B) | False |
|
|
|
| 5 | |
The Unearned Revenue adjustment can occur only in merchandising businesses. |
| | A) | True |
| | B) | False |
|
|
|
| 6 | |
The Salaries Payable account is an example of an unearned revenue account. |
| | A) | True |
| | B) | False |
|
|
|
| 7 | |
Taking a physical count of the merchandise is optional under a periodic inventory system. |
| | A) | True |
| | B) | False |
|
|
|
| 8 | |
The first adjusting entry to remove the beginning balance of Merchandise Inventory causes a zero balance in the Merchandise Inventory account. |
| | A) | True |
| | B) | False |
|
|
|
| 9 | |
If a payment is received from a customer in advance of performing the service, the Cash account should be debited. |
| | A) | True |
| | B) | False |
|
|
|
| 10 | |
An actual count of a stock of goods on hand is called a physical inventory. |
| | A) | True |
| | B) | False |
|
|
|
| 11 | |
Unearned Subscriptions is classified as a revenue account. |
| | A) | True |
| | B) | False |
|
|
|
| 12 | |
Unearned Revenue usually has a debit balance. |
| | A) | True |
| | B) | False |
|
|
|
| 13 | |
Unearned Revenue is usually reported on the Balance Sheet. |
| | A) | True |
| | B) | False |
|
|
|
| 14 | |
To accrue wages earned but not yet paid, the adjusting entry would include a debit to Wages Payable. |
| | A) | True |
| | B) | False |
|
|
|
| 15 | |
To record depreciation expense on Equipment, the adjusting journal entry would include a debit to the Accumulated Depreciation account |
| | A) | True |
| | B) | False |
|
|
|
| 16 | |
The Unearned Revenue account would be used when a company |
| | A) | collects cash and earns the revenue in the same fiscal period. |
| | B) | pays cash for services not yet earned. |
| | C) | pays cash for services earned in two fiscal periods. |
| | D) | collects cash before it has been earned. |
| | E) | does none of these. |
|
|
|
| 17 | |
At the time a firm adjusts Merchandise Inventory, the Income Summary account |
| | A) | has no balance. |
| | B) | contains two closing entries. |
| | C) | contains an adjusting entry for unearned revenue. |
| | D) | contains the last fiscal period's adjusting entry for Merchandise Inventory. |
| | E) | is none of these. |
|
|
|
| 18 | |
In the completed work sheet, which set of columns would contain the two balances in the Income Summary representing beginning and ending inventory? |
| | A) | Trial Balance and Income Statement columns |
| | B) | Adjustments and Balance sheet columns |
| | C) | Adjustments and Income Statement columns |
| | D) | Trial Balance and Adjustments columns |
| | E) | none of these |
|
|
|
| 19 | |
On the work sheet, Purchases Discount appears in |
| | A) | the Trial Balance Debit column and the Income Statement Debit column. |
| | B) | the Trial Balance Debit column and the Income Statement Credit column. |
| | C) | the Trial Balance Credit column and the Income Statement Credit column. |
| | D) | the Trial Balance Credit column and the Balance Sheet Credit column. |
| | E) | none of these. |
|
|
|
| 20 | |
On the work sheet, ending merchandise inventory will appear on |
| | A) | the credit side of the Balance Sheet column. |
| | B) | the debit side of the Balance Sheet column. |
| | C) | the debit side of the Income Statement column. |
| | D) | the credit side of the Trial Balance column. |
| | E) | none of these. |
|
|
|
| 21 | |
A hockey team records ticket revenue received in advance as Unearned Subscriptions. On the team's work sheet, the required adjusting entry at period end to show the amount which has been earned is |
| | A) | debit Cash and credit Unearned Subscriptions. |
| | B) | debit Subscriptions Income and credit Unearned Subscriptions. |
| | C) | debit Unearned Subscriptions and credit Cash. |
| | D) | debit Unearned Subscriptions and credit Subscriptions Income. |
| | E) | none of these. |
|
|
|
| 22 | |
The appropriate adjusting entry to remove the beginning balance in the Merchandise Inventory account would include |
| | A) | a debit to the Income Summary account and a credit to Merchandise Inventory. |
| | B) | a debit to the Merchandise Inventory account and a credit to Income Summary. |
| | C) | a debit to the Merchandise Inventory account and a credit to Purchases |
| | D) | a debit to the Income Summary account and a credit to Purchases |
| | E) | none of these. |
|
|
|
| 23 | |
The Income Summary account line on the work sheet |
| | A) | has a debit and a credit side. |
| | B) | is the only account in which we don't combine the debit and credit figures. |
| | C) | relates to adjusting merchandise inventory. |
| | D) | is all of these. |
| | E) | is none of these. |
|
|
|
| 24 | |
To formula to compute gross profit is |
| | A) | Sales -Cost of goods sold. |
| | B) | Beginning Merchandise Inventory - Ending Merchandise Inventory |
| | C) | Sales -(Cost of goods sold+ Transportation in). |
| | D) | Sales -Beginning Inventory + Purchases |
| | E) | none of these. |
|
|
|
| 25 | |
In order to figure net purchases, we need to know the balances in which of the following accounts: |
| | A) | Purchases. |
| | B) | Sales. |
| | C) | Sales Discounts. |
| | D) | all of these. |
| | E) | none of these. |
|
|
|
| 26 | |
In order to figure Net Sales, we need to know the balances in which of the following accounts: |
| | A) | Sales Returns and Allowances |
| | B) | Sales. |
| | C) | Sales Discounts. |
| | D) | all of these. |
| | E) | none of these. |
|
|
|
| 27 | |
Which of the following accounts would appear on the Income Statement |
| | A) | Accounts Payable |
| | B) | Purchases. |
| | C) | Prepaid Insurance. |
| | D) | Unearned Service Revenue. |
| | E) | none of these. |
|
|
|
| 28 | |
Which of the following accounts would appear on the Balance Sheet |
| | A) | Sales |
| | B) | Merchandise Inventory. |
| | C) | Insurance Expense. |
| | D) | Depreciation Expense. |
| | E) | none of these. |
|
|
|
| 29 | |
If an advance payment of $1,000 was received from a customer at the beginning of the period but only $400 had been earned as of the end of the accounting period, the adjusting journal entry at the end of the accounting period would include |
| | A) | debit to Unearned Revenue for $400 and a credit to Service Revenue for $400 |
| | B) | debit to Unearned Revenue for $600 and a credit to Service Revenue for $600. |
| | C) | debit to Service Revenue for $1000 and a credit to Unearned Revenue for $1000. |
| | D) | debit to Unearned Revenue for $1000 and a credit to Service Revenue for $1000. |
| | E) | none of these. |
|
|
|
| 30 | |
To record the expiration of $560 of prepaid insurance, the adjusting journal entry at the end of the accounting period would include |
| | A) | debit to Prepaid Insurance for $560 and a credit to Insurance Expense for $560 |
| | B) | debit to Insurance Expense for $560 and a credit to Prepaid Insurance for $560. |
| | C) | debit to Cash for $560 and a credit to Prepaid Insurance for $560. |
| | D) | debit to Insurance Expense for $560 and a credit to Cash for $560. |
| | E) | none of these. |
|
|
.