Question 1

Cost of goods sold may be computed by

Accepted Answer

A)  adding beginning inventory and ending inventory together.
B)  subtracting ending inventory from cost of goods available for sale.
C)  subtracting beginning inventory from cost of goods available for sale.
D)  adding beginning inventory to cost of goods available for sale.
E)  subtracting beginning inventory from net purchases.

Question 2

Immediately after a reversing entry to reverse the entry for accrued salaries has been posted, Salary Expense will have a credit balance.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is NOT true about closing entries for a merchandising business?

Accepted Answer

A)  The closing entries for a merchandise business have a different closing order than a service business.
B)  Nominal Accounts are closed at the end of the fiscal period.
C)  Temporary-equity accounts are closed at the end of the fiscal period.
D)  None of the above are true.

Question 4

Match the terms below with the correct definitions.
 
-The final figure on the income statement

Accepted Answer

The answer of Match the terms below with the correct...

Question 5

A reversing entry could be used if

Accepted Answer

A)  there is an adjusting entry.
B)  the adjusting entry increases an asset or liability account.
C)  the adjusting entry account did not have a previous balance.
D)  all of these were true.
E)  none of these were true.

Question 6

Assuming Net Sales are $180,000, Cost of Goods Sold is $79,000, Selling Expenses are $28,500, General Expenses are $22,800, and Interest Expense is $2,000, then Net Income is

Accepted Answer

A)  $27,700.
B)  $49,700.
C)  $101,000.
D)  $95,300.
E)  $47,700.

Question 7

Selected account balances of Rich and Company as of December 31, the end of its fiscal year, are listed below in alphabetical order.
  Instructions:
Based on the account balances above, prepare a classified balance sheet.

Accepted Answer

The answer of Selected account balances of Rich and Company...

Question 8

Match the terms below with the correct definitions.
 
-Excess of gross profit over operating expenses

Accepted Answer

The answer of Match the terms below with the correct...

Question 9

Working Capital =

Accepted Answer

A)  Current Assets - Long-Term Liabilities
B)  Current Assets - Current Liabilities
C)  Long Term Assets - Long Term Liabilities
D)  Total Assets - Total Liabilities

Question 10

A decrease in Sales Discounts results in a decrease in Net Income.

Accepted Answer

A) True 
 B)False

Question 11

Reversing entries are journalized and posted before adjusting and closing entries are journalized and posted.

Accepted Answer

A) True 
 B)False

Question 12

Match the terms below with the correct definitions.
 
-Portrays a firm's ability to pay its short-term debts

Accepted Answer

The answer of Match the terms below with the correct...

Question 13

Examples of current assets are

Accepted Answer

A)  supplies capable of being used up within twelve months.
B)  merchandise inventories convertible into cash within twelve months or less.
C)  receivables convertible into cash within twelve months or less.
D)  all of these.
E)  none of these.

Question 14

A reversing entry must be made for each adjusting entry.

Accepted Answer

A) True 
 B)False

Question 15

Match the terms below with the correct definitions.
 
-The classification that helps to identify which of the firm's debts are paid over a comparatively long period

Accepted Answer

The answer of Match the terms below with the correct...

Question 16

What would be an appropriate account number for Unearned Revenues?

Accepted Answer

A)  12
B)  21
C)  32
D)  42

Question 17

Which statement is NOT true about the Chart of Accounts?

Accepted Answer

A)  The order of the chart of accounts is important.
B)  The first digit in the account number helps identify and organize the accounts in the chart.
C)  Income statement accounts are listed before balance sheet accounts.
D)  None of the above are true.

Question 18

Subclassifications of operating expenses are

Accepted Answer

A)  Selling Expenses
B)  General Expenses
C)  Both A & B
D)  Neither A or B

Question 19

A net loss will occur if revenues are

Accepted Answer

A)  greater than expenses
B)  less than expenses
C)  equal to expenses
D)  greater than Cost of Goods Sold

Question 20

Match the terms below with the correct definitions.
 
-Excess of net sales over the cost of goods sold

Accepted Answer

The answer of Match the terms below with the correct...

Exam 12: Financial Statements, Closing Entries, and Reversing Entries

A decrease in Sales Discounts results in a decrease in Net Income.

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Match the terms below with the correct definitions. -The classification that helps to identify which of the firm's debts are paid over a comparatively long period

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Which statement is NOT true about the Chart of Accounts?

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Subclassifications of operating expenses are

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A net loss will occur if revenues are

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Working Capital =

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Match the terms below with the correct definitions. -Excess of net sales over the cost of goods sold

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Selected account balances of Rich and Company as of December 31, the end of its fiscal year, are listed below in alphabetical order. Instructions: Based on the account balances above, prepare a classified balance sheet.

Correct AnswerverifiedShow Answer

Examples of current assets are

Correct AnswerverifiedShow Answer

Immediately after a reversing entry to reverse the entry for accrued salaries has been posted, Salary Expense will have a credit balance.

Correct AnswerverifiedShow Answer

A reversing entry could be used if

Correct AnswerverifiedShow Answer

A reversing entry must be made for each adjusting entry.

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Match the terms below with the correct definitions. -The final figure on the income statement

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Reversing entries are journalized and posted before adjusting and closing entries are journalized and posted.

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Match the terms below with the correct definitions. -Portrays a firm's ability to pay its short-term debts

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Cost of goods sold may be computed by

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What would be an appropriate account number for Unearned Revenues?

Correct AnswerverifiedShow Answer

Assuming Net Sales are $180,000, Cost of Goods Sold is $79,000, Selling Expenses are $28,500, General Expenses are $22,800, and Interest Expense is $2,000, then Net Income is

Correct AnswerverifiedShow Answer

Match the terms below with the correct definitions. -Excess of gross profit over operating expenses

Correct AnswerverifiedShow Answer

Which of the following statements is NOT true about closing entries for a merchandising business?

Correct AnswerverifiedShow Answer

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