Question 1

Which of the following is not a current asset?

Accepted Answer

A)   Accounts Receivable
B)   Prepaid Insurance
C)   Merchandise Inventory
D)   EquipmentE) C) and D)
F) B) and D)

Question 2

The total of the operating expenses for the period is deducted from the gross profit on sales to determine the net income or net loss from operations.

Accepted Answer

A) True 
 B)False

Question 3

On a classified balance sheet,Accounts Payable would appear in the ____________________ section.

Accepted Answer

The answer of On a classified balance sheet,Accounts Payable would...

Question 4

Which of the following statements is correct?

Accepted Answer

A)   The term single-step income statement is sometimes used to describe a classified income statement.
B)   If a business is to earn a net income,the gross profit on sales must be greater than operating expenses.
C)   Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement.
D)   Sales less Operating Expenses equals Gross Profit.E) None of the above
F) A) and B)

Question 5

The beginning capital balance shown on a statement of owner's equity is $86,000.Net income for the period is $36,000.The owner withdrew $44,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Accepted Answer

A)   $78,000.
B)   $94,000.
C)   $122,000.
D)   $166,000.E) None of the above
F) All of the above

Question 6

The statement of owner's equity is prepared before the balance sheet so that the beginning owner's equity balance is available for the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

On Mar.1,Brown's Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited an asset account for the full amount.Select the adjusting entry made on December 31,to record the amount of rent that had expired.

Accepted Answer

A)  
B)  
C)  
D)  E) A) and B)
F) B) and C)

Question 8

At the end of the period,the balance of the Accounts Receivable account is closed to the Income Summary account.

Accepted Answer

A) True 
 B)False

Question 9

Cash,items that will normally be converted to cash within one year,and items that will be used up within one year are called ____________________ assets.

Accepted Answer

The answer of Cash,items that will normally be converted to...

Question 10

The difference between net sales and the cost of goods sold is called the ____________________ on sales.

Accepted Answer

The answer of The difference between net sales and the...

Question 11

Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question.  Select the correct closing entry that RB Auto would make to close the owner's withdrawal account at the end of the accounting period.

Accepted Answer

A)   debit R.Holloway,Drawing $500 and credit Income Summary for $500.
B)   debit Income Summary $500 and credit R.Holloway,Drawing for $500.
C)   debit R.Holloway,Capital $500 and credit R.Holloway,Drawing for $500.
D)   debit R.Holloway,Drawing $500 credit R.Holloway,Capital for $500.E) B) and D)
F) B) and C)

Question 12

Each balance appearing in the ____________________ section of the worksheet is closed into the Income Summary account.

Accepted Answer

The answer of Each balance appearing in the ____________________ section...

Question 13

The adjusting entry to record depreciation should be reversed at the start of a new fiscal period to make subsequent financial record keeping easier.

Accepted Answer

A) True 
 B)False

Question 14

Current assets are usually listed on a balance sheet in order of liquidity.

Accepted Answer

A) True 
 B)False  True

Question 15

Which of the following statements is not correct?

Accepted Answer

A)   The gross profit percentage is calculated by dividing the gross profit for the year by the net sales for the year.
B)   The average inventory is calculated by adding the beginning inventory to the ending inventory and dividing the sum by 2.
C)   A current ratio of 3.5 to 1 means that a firm has $3.50 in current liabilities for every $1 of current assets.
D)   Working capital is the difference between total current assets and total current liabilities.E) None of the above
F) All of the above C

Question 16

After the ____________________ entries are posted,the Sales account will have a zero balance.

Accepted Answer

The answer of After the ____________________ entries are posted,the Sales...

Question 17

The beginning capital balance shown on a statement of owner's equity is $100,000.Net income for the period is $50,000.The owner withdrew $25,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Accepted Answer

A)   $175,000.
B)   $150,000.
C)   $125,000.
D)   $100,000.E) B) and C)
F) A) and B)

Question 18

Gross profit on sales is calculated by subtracting

Accepted Answer

A)   sales returns and allowances from sales.
B)   cost of goods sold from net sales.
C)   ending inventory from the total merchandise available for sale.
D)   total expenses from sales.E) None of the above
F) C) and D)

Question 19

An adjusting entry was made for accrued salaries of $600 at the end of 2013.The adjusting entry was then reversed.To record the first payroll of 2014,which totaled $1,500,Salaries Expense should be debited for ___________________.

Accepted Answer

The answer of An adjusting entry was made for accrued...

Question 20

Each reversing entry is the exact opposite of the related ____________________ entry.

Accepted Answer

adjusting

Exam 13: Financial Statements and Closing Procedures

Which of the following is not a current asset?

Correct AnswerverifiedShow Answer

The total of the operating expenses for the period is deducted from the gross profit on sales to determine the net income or net loss from operations.

Correct AnswerverifiedShow Answer

On a classified balance sheet,Accounts Payable would appear in the ____________________ section.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The beginning capital balance shown on a statement of owner's equity is $86,000.Net income for the period is $36,000.The owner withdrew $44,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Correct AnswerverifiedShow Answer

The statement of owner's equity is prepared before the balance sheet so that the beginning owner's equity balance is available for the balance sheet.

Correct AnswerverifiedShow Answer

On Mar.1,Brown's Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited an asset account for the full amount.Select the adjusting entry made on December 31,to record the amount of rent that had expired.

Correct AnswerverifiedShow Answer

At the end of the period,the balance of the Accounts Receivable account is closed to the Income Summary account.

Correct AnswerverifiedShow Answer

Cash,items that will normally be converted to cash within one year,and items that will be used up within one year are called ____________________ assets.

Correct AnswerverifiedShow Answer

The difference between net sales and the cost of goods sold is called the ____________________ on sales.

Correct AnswerverifiedShow Answer

Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question. Select the correct closing entry that RB Auto would make to close the owner's withdrawal account at the end of the accounting period.

Correct AnswerverifiedShow Answer

Each balance appearing in the ____________________ section of the worksheet is closed into the Income Summary account.

Correct AnswerverifiedShow Answer

The adjusting entry to record depreciation should be reversed at the start of a new fiscal period to make subsequent financial record keeping easier.

Correct AnswerverifiedShow Answer

Current assets are usually listed on a balance sheet in order of liquidity.

Correct AnswerverifiedTrue

Which of the following statements is not correct?

Correct AnswerverifiedC

After the ____________________ entries are posted,the Sales account will have a zero balance.

Correct AnswerverifiedShow Answer

The beginning capital balance shown on a statement of owner's equity is $100,000.Net income for the period is $50,000.The owner withdrew $25,000 cash from the business and made no additional investments during the period.The owner's capital balance at the end of the period is

Correct AnswerverifiedShow Answer

Gross profit on sales is calculated by subtracting

Correct AnswerverifiedShow Answer

An adjusting entry was made for accrued salaries of $600 at the end of 2013.The adjusting entry was then reversed.To record the first payroll of 2014,which totaled $1,500,Salaries Expense should be debited for ___________________.

Correct AnswerverifiedShow Answer

Each reversing entry is the exact opposite of the related ____________________ entry.

Correct Answerverifiedadjusting

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True

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C

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adjusting