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ACC 291T Apply Assignment Week 2 Connect Assignment
(May 2019) (with Excel File)
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During March a firm purchased $22,790 of merchandise and paid
freight charges of $1,860. If the net delivered cost of purchases for the
March is $22,040, what is the total purchase returns for March?
Multiple Choice • $0 • $1,110 • $2,610 • $3,720 A firm had
purchases of $17,000, freight charges of $340, and purchases returns
and allowances of $1,500 during one month. Its net delivered cost of
purchases was: Multiple Choice • $15,160. • $18,840. • $17,000. •
$15,840. Lewis Corporation engaged in the following transactions
during June. DATE TRANSACTIONS 2019 June 4 Purchased
merchandise on account from Salinas Company; Invoice 100 for $965;
terms n/30. 15 Recorded purchases for cash, $1,450. 30 Paid
amount due to Salinas Company for the purchase on June 4. Record
these transactions in a general journal. Record the following
transactions of Fronke’s Fashions in a general journal: DATE
TRANSACTIONS 2019 April 1 Purchased merchandise for cash,
$1,120. 2 Returned merchandise for cash purchased on April 1;
received a cash refund of $127. 4Purchased merchandise on credit
from Breit Distributors, Invoice 125, $652, terms n/30; freight of $27.
prepaid by Breit Distributors and added to the invoice. 7 Returned

damaged merchandise purchased on April 4 from Breit Distributors;
received Credit Memorandum 202 for $34. 30 Paid the amount due
to Breit Distributors for the purchase of April 4, less the return on April
7, Check 1458. On April 1, Moloney Meat Distributors sold merchandise
on account to Fronke’s Franks for $3,700 on Invoice 1001, terms 2/10,
n/30. The cost of merchandise sold was $2,400. Payment was received
in full from Fronke’s Franks, less discount, on April 10. Record the
transactions for Moloney Meat Distributors on April 1 and April 10. The
company uses the perpetual inventory system. Record the following
transactions of Fashion Park in a general journal. Fashion Park must
charge 7 percent sales tax on all sales. The company uses the perpetual
inventory system. (Round your intermediate calculations and final
answers to the nearest whole dollar value.) DATE TRANSACTIONS 2019
April 2 Sold merchandise for cash, $2,640 plus sales tax. The
cost of merchandise sold was $1,640. 3 The customer purchasing
merchandise for cash on April 2 returned $320 of the merchandise;
provided a cash refund to the customer. The cost of returned
merchandise was $220. 4 Sold merchandise on credit to Jordan Clark;
issued Sales Slip 908 for $1,190 plus tax, terms n/30. The cost of the
merchandise sold was $1,190. 6 Accepted return of merchandise from
Jordan Clark; issued Credit Memorandum 302 for $220 plus tax. The
original sale was made on Sales Slip 908 of April 4. The cost of returned
merchandise was $230. 30 Received payment on account from Jordan
Clark in payment of her purchase of April 4, less the return on April 6.
Record the following transactions of Allen Inc.: (Round your answers to
2 decimal places) DATE TRANSACTIONS 2019 March 8
Purchased merchandise on credit from Alenikov Designs, Invoice
1091, list price $5,000, trade discounts of 30% and 20%; terms 3/10,

n/30. 17 Paid the amount owed on the purchase of March 8 from
Alenikov Designs, less the 3 percent discount, Check 185. Record the
following transactions of J. Min Designs in a general journal. The
company uses the perpetual inventory system. DATE TRANSACTIONS
2019 April 1 Purchased merchandise on credit from O’Rourke
Fabricators, Invoice 885, $3,550, terms 1/10, n/30; freight of $75
prepaid by O’Rourke Fabricators and added to the invoice (total invoice
amount, $3,625). 9 Paid amount due to O’Rourke Fabricators for the
purchase of April 1, less the 2 percent discount, Check 457. 15
Purchased merchandise on credit from Kroll Company, Invoice
145, $1,800, terms 1/10, n/30; freight of $130 prepaid by Kroll and
added to the invoice. 17 Returned damaged merchandise purchased
on April 15 from Kroll Company; received Credit Memorandum 332 for
$105. 24 Paid the amount due to Kroll Company for the purchase of
April 15, less the return on April 17, taking the 1 percent discount,
Check 470. Record these transactions in a general journal. Tune Tones
Instrument Tuning Company owes Mandy Lynn's Music Studio $5,016
as of November 1. During November, Tune Tones purchased
merchandise from Mandy Lynn totaling $8,655 and made payments on
account to Mandy Lynn in the amount of $7,410. The amount Tune
Tones owes Mandy Lynn on November 30 is: Multiple Choice •
$6,261. • $3,771. • $11,049. • $7,410. During the year, a firm
purchased $257,500 of merchandise and paid freight charges of
$41,850. If the total purchases returns and allowances were $16,440
and purchase discounts were $8,900 for the year, what is the net
delivered cost of purchases? Multiple Choice • $299,350 •
$274,010 • $324,690 • $190,310
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This Tutorial contains excel file which can be used in case the value
changes 1) A firm’s bank reconciliation statement shows a book balance
of $15.940,an NSF check of $460,and a service charge of $26.Its
adjusted book balance is 2) On January 2,The Public Legal issued check
2108 for $260 to establish a petty cash fund.Indicate how this
transaction would be recorded in a general journal 3) After returning
from a three-day business trip,the accountant for southeast
sales,JohannaEstrada,checked bank activity in the company’s checking
account online.The activity for the last three days follows. After
matching these transactions to the company’s cash account in the
general ledger,Johanna noted the following unrecorded transactions: •
The ATM withdrawal on 9/22/201 was for personal use by the
owner,Robert Savage. • The ACH credit on 9/22/2019 was an
electronic funds payment received on account from Edwards UK, a
credit customer located in Great Britain. • The bill payment made
9/23/2019was to waste control Trash Services(utilities). • The loan
payment on 9/24/2019 was an automatic debit by central motors for

the company’s monthly payment on a loan for its automobiles.The loan
does not bear interest. Prepare the journal entries in a general journal
to record the four transactions above.(Round your answers to 2
decimal places.) 4) On January 2,Jasmine’s Beauty Supplies
Inc,issued Check 3100 for $300 to establish a petty cash fund.On
January 31, Check 3159 was issued to replenish the petty cash fund.An
analysis of payments from the fund showed these totals: Supplies, $44;
Delivery Expense,$85; and Miscellaneous Expense, $20. Indicate how
these transactions would be recorded in a general journal. 5)Read each
of the following transactions. A) The cash sales per a register tape
were $579.The cash count is $552. B) The cash sales per a register tape
were $8,700.The cash count is $8,280. Prepare the general journal
entries to record the above transactions. 6) Teng Corporation received
a bank statement showing a balance of $14,250 as of October
31,2019.The firm’s records showed a book balance of $13,893 on
October 31. The difference between the two balances was caused by
the following items. 1.A debit memorandum for an NSF check from
Richard Wolf for $415. 2. Three outstanding checks:Check 7017 for
$115, Check 7098 for $46,and Check 7107 for $1,470. 3. A bank service
charge of $11. 4.A deposit in transit of $848. Prepare the adjusted bank
balance section and the adjusted book balance section of the bank
reconcillationstatement.Prepare the necessary journal entries for the
year 2019. 7) Florence company received a bank statement showing
a balance of $12,400 on November 30,2019.During the bank
reconcillationprocess.Florence’s accountant noted the following bank
errors: A) A check for $147 issued by Florentine, Inc., was mistakenly
charged to Florence company’s account. B) Check 2782 was written for
$100 but was paid by the bank as $1,100. C) Check 2920 for $81 was

paid by the bank twice. D) A deposit for $570 on November 22 was
credited by the bank for $750. Assuming outstanding checks total
$1,750, Prepare the adjusted bank balance section of the November
30,2019, bank reconciliation. 8) Northwest Gift Shop, a retail business,
started business on April 29,2019.It keeps a $300 change fund in its
cash register. The cash receipts for the period from April 29 to April
30,2019, are shown below. Record the cash receipts on April 29 and
April 30, 2019, in a general journal. 9) On March 31,2019, Home
Decorating Pavilion received a bank statement showing a balance of
$9,690. The balance in the firm’s checkbook and cash account on the
same date was $10,134.The difference between the two balances is
caused by the items listed below, a) A $2,815 deposit made on
March 30 does not appear on the bank statement. b) Check 358 for
$455 issued on March 29 and check 359 for $1,590 issued on March 30
have not yet been paid by the bank. c) A credit memorandum shows
that the bank has collected a $1,200 note receivable and interest of
$210 for the firm. d) A service charge of $19 appears on the bank
statement. e) A debit memorandum shows an NSF check for
$495.(The check was issued by Dane jaris, a credit customer.) f) The
firm’s records Indicate that check 341 of March 1 was issued for $800
to pay the month’s rent.However, the cancelled check and the listing on
the bank statement show that the actual amount of the check was
$750. g) The bank made an error by deducting a check for $530
issued by another business from the balance of Home Decorating
Pavilion’s account. Required: 1.Prepare a bank reconciliation statement
for the firm as of March 31,2019. 2.Recordentires for any items on the
bank reconciliation statement that must be journalized. 10) Read the
following transactions. Lourdes LLC.keeps a $100 change fund in its

cash register.At the end of the day, Cash sales per the register tape
were $2,650.The cash count was $3,000. Calculate the amount over or
Short.
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This Tutorial contains excel file which can be used in case the value
changes 1) The following selected accounts were taken from the
financial records of Los Olivos Distributors at December 31,2019.All
accounts have normal balances. Cash $27,945 Accounts Receivable
46,200 Note Receivable 8,000 Merchandise inventory
34,200 Prepaid Insurance 2,200 Supplies 1,260 Equipment
42,000 Accumulated depreciation,equipment 22,000 Note
payable to bank,due 2020 20,000 Accounts payable 28,700 Interest
payable 200 Sales 522,500 Sales discounts 1,700 Cost of goods
sold 388,025 Accounts Receivable at December 31,2018, was
$56,300.Merchandise at December 31,2018, was $57,100.Based on the
account balances above,Calculate the following: a. The gross profit
percentage. b. Working capital. c. The current ratio. d. The inventory

turnover. e. The accounts receivable turnover. All sales wer on credit 2)
Solomon Company reports the following in its most recent year of
operations: • Sales ,$1,040,400(all on account) • Cost of Goods sold
,$601,400 • Gross Profit,$439,000 • Accounts
receivable,beginning of year,$92,000 • Accounts receivable,end of
year,$112,000 • Merchandaise inventory,beginning of year,$57,000 •
Merchandaise inventory,end of year.$67,000 Based on these
balances,compute: a. The accounts receivable turnover. b. The
inventory turnover. 3) The worksheet of Bridget’s Office Supplies
contains the following revenue, cost and expenses account. The
merchandise inventory amounted to $59,675 on January 1, 2019 and
$52,625 on December 31, 2019. The expense accounts numbered 611
through 617 represent selling expenses, and those numbered 631
through 646 represent general and administrative expenses. 401 Sales
$248,200 Cr. 451 Sales Returns and Allowances 4,340 Dr.
491 Miscellaneous Income 390 Cr. 501 Purchases 103,500 Dr. 502
Freight In 1,965 Dr. 503 Purchases Returns and Allowances
3,590 Cr. 504 Purchases Discounts 1,790 Cr. 611 Salaries
Expense-Sales 45,200 Dr. 614 Store Supply Expense 2,300 Dr. 617
Depreciation Expense-Store Equipment 1,500 Dr. 631 Rent
Expense 13,400 Dr. 634 Utilities Expense2,990 Cr. 637 Salaries
Expense-Office 21,000 Cr. 640 Payroll Taxes Expense5,900 Dr. 643
Depreciation Expense-Office Equipment 560 Dr. 646
Uncollectible Accounts Expense 710 Dr. 691 Interest
expense 720 Dr. Prepare a classified income statement for this firm
for the year ended December 31,2019. 4) The Worksheet of Bridger’s
Office Supplies contains the following revenue,cost and expense
accounts.The merchandise inventory amounted to $58.175 on January

1,2019,and$51,125 on December 31,2019. The expense accounts
numbered 611 through 617 represent selling expenses,and those
numbered 631 through 646 represent general and administrative
expenses. 401 Sales $244,400 Cr. 451 Sales Returns and
Allowances 4,190 Dr. 491 Miscellaneous Income 240 Cr.
501 Purchases 102,000 Dr. 502 Freight In 1,815 Dr. 503 Purchases
Returns and Allowances 3,440 Cr. 504 Purchases Discounts
1,640 Cr. 611 Salaries Expenses-Sales 43,700 Dr. 614 Store
Supplies Expense 2,150 Dr. 617 Depreciation Expense-Store
Equipment1,350 Dr. 631 Rent,Expense 11,900 Dr. 634 Utilities
Expense 2,840 Dr. 637 Salaries Expense-Office 19,500 Dr. 640
Payroll Taxes Expense4,400 Dr. 643 Depreciation Expense-
Office Equipment 410 Dr. 646 Uncollectible Accounts Expense 560
Dr. 691 Interest Expense 420 Dr. The worksheet of Bridget’s
Office Supplies contains the following owner’s equity accounts. 301
Bridget Swanson, Capital $62,160 Cr. 302 Bridget Swanson, Drawing
41,000 Dr. 5) The beginning capital balance shown on a statement
of owner’s equity is $110,000.Net income for the period is $51,000. The
owner withdrew $25,500 cash from the business and made no
additional investments during the period. The owner’s capital balance
at the end of the period is o 186,500 o $135,500 o $110,000
o $161,000 6) A Company reported gross profit of $93,000, total
operating expenses of $49,500 and interest income of $3,800. What is
the income from operations? o $43,500 o $35,900 o $39,700 o
$47,300 7) 2019 Dec.31 (Adjustment a) Uncollectible Accounts
Expense Allowance for Doubtful Accounts To record estimated loss
from Uncollectible accounts based on 0.5% of net credit sales,$728,000
3,640.00 3,640.00 31 (Adjustment b) Supplies Expense To record

supplies used during the year 5,000.00 5,000.00 31 (Adjustment c)
Insurance Expenses Prepaid Insurance To record expired insurance on
1-year $5,760 policy purchased on oct.1 1,440.00 1,440.00 31
(Adjustment d) Depreciation. Exp- Store Equipment Accum.
Depreciation-Store Equip. To record depreciation 14,600.00 14,600.00
31 (Adjustment e) Salaries Expense-office Salaries payable To record
accrued salaries for Dec. 29-31 3,100.00 3,100.00 31 (Adjustment f)
Payroll Taxes Expense Social Security Tax Payable Medicare Tax Payable
TO record accrued payroll taxes on accrued salaries: social security,
6.2% * 3,100 = $192.20; Medicare, 1.45% * 3,100 = $44.95 237.15
192.20 44.95 31 (Adjustment g) Interest Expense Interest Payable To
record accrued interest on a 4-month,6% trade note payable dated
Nov. 1: $23,000 * 2/12 = $230.00230.00 230.00 8) The Adjusted
Trial Balance section of the worksheet for Van Zant Janitorial Supplies
follows.The owner made no additional investments during the year.
Accounts DebitCredit Cash $ 19,600 Accounts Receivable
60,000 Allowance for Doubtful Accounts$ 200 Merchandise
Inventory 187,200 Supplies 7,240 Prepaid Insurance
3,160 Equipment52,000 Accumulated Depreciation –
Equipment18,800 9) At the end of the year Stan Still Stationery Store
had the following balances: Sales $690,000 ;Sales Dicounts $2,640 ;
Sales Returns and Allownces $15,6000 ; Sales Salaries Expense $75,000.
The Net Sales for the year are: • $596,760 • $674,400 •
$671,760 • $687,360 10) The worksheet of Bridget’s Office
Supplies contains the following revenue, cost, and expense accounts.
The merchandise inventory amounted to $58,375 on January 1, 2019
and $51,325 on December 31, 2019. The expense accounts numbered
611 through 617 represents selling expenses, and those numbered 631

through 646 represent general and administrative expenses. 401 Sales
$ 244,800 Cr. 451 Sales Returns and Allowances 4,210 Dr.
491 Miscellaneous income 260 Cr. 501 Purchases102,200 Dr. 502
Freight In 1,835 Dr. 503 Purchases Returns and Allowances
3,460 Cr. 504 Purchases Discounts 1,660 Cr. 611 Salaries
Expense-Slaes 43,900 Dr. 614 Store Supplies Expense 2,170 Dr.
617 Deprediction Expense- Store Equipment 1,370 Dr. 631 Rent
Expense 12,100 Dr. 634 Utilities Expense2,860 Dr. 637 Salaries
Expense-Office 19,700 Dr. 640 Payroll Taxes Expense4,600 Dr. 643
Depreciation Expense- Office Equipment 430 Dr. 646
Uncollectible Accounts Expense 580 Dr. 691 Interest
Expense 460 Dr. The Worksheet of Bridget’s Office Supplies Contains
the following owner’s equity accounts. No additional investments were
made during the period. 301 Bridget Swanson, Capital $ 62,630
Cr. 302 Bridget Swanson, Drawing 40,900 Dr.
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ACC 291T Assignment Week 1 Apply: Connect® Exercise
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ACC 291T Week 1 Apply: Connect® Exercise Review the Knowledge
Check in preparation for this assignment. Complete the Week 1

Exercise in Connect®. Note: You have only one attempt available to
complete this assignment. Grades must be transferred manually to
eCampus by your instructor. Don’t worry, this might happen after your
due date If Lacy’s Department Store charges 8 percent sales tax, the
amount of sales tax collected on a $525 sale would be Multiple Choice •
$4.20. • $420.00. • $42.00. • $567.00. ___________ are required to
collect sales tax from customers, make periodic payments to the taxing
authority, and pay the taxes due when reports are filed. Multiple
Choice • Wholesalers • Retailers • Manufacturers • Distributors The
Sales Returns and Allowances account is classified as Multiple Choice •
an asset account. • a contra asset account. • a contra revenue account.
• a revenue account. The amount used by wholesalers to record sales in
the general journal is Multiple Choice • the retail price. • the net price.
• the list price. • the original price. Which of the following describes the
Sales Tax Payable account? Multiple Choice • A liability account with a
normal credit balance. • A liability account with a normal debit balance.
• A revenue account with a normal credit balance. • An asset account
with a normal debit balance. Which of the following describes the Sales
Returns and Allowances account? Multiple Choice • A revenue account
with a normal credit balance. • An expense account with a normal debit
balance. • A contra expense account with a normal debit balance. • A
contra revenue account with a normal debit balance. The amount of
the trade discount taken by the customer is: Multiple Choice • recorded
as an expense. • recorded as a revenue. • recorded as a liability. • not
recorded directly as sales are recorded net of trade discounts. Kay Sadia
sold merchandise for $7,200 subject to a 8% sales tax. The entry in the
general journal will include a debit to Accounts Receivable for: Multiple
Choice • $6,624.00. • $7,200.00. • $7,776.00. • $12,960.00. Modern

Candy, a wholesaler, sold a crate of candy for $360.00 on account to a
customer with credit terms of 1/10, n/30. If the customer pays within
the discount period, what would be the total amount credited to the
sales account? Multiple Choice • $360.00 • $356.40 • $363.60 •
$324.00 Kay Sadia sold merchandise for $7,200 subject to 8% sales tax.
The entry in the general journal to record the sale will include: Multiple
Choice • a debit to Sales Tax Payable for $576.00. • credit to Sales for
$7,200.00. • a credit to Sales for $7,776.00. • a debit to Accounts
Receivable for $7,200.00.
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ACC 291T Assignment Week 1 Practice: Connect® Knowledge
Check
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ACC 291T Week 1 Practice: Connect® Knowledge Check Complete the
Week 1 Knowledge Check in Connect®. Note: You have unlimited
attempts available to complete this practice assignment. The highest
scored attempt will be recorded. These assignments have earlier due
dates, so plan accordingly. Grades must be transferred manually to

due date Hour Place Clock Shop sold a grandfather clock for $3,750
subject to a 7% sales tax. The entry in the general journal will include a
debit to Accounts Receivable for Multiple Choice $3,625.00. $4,012.50.
$3,750.00. $3,487.50. The amount used by wholesalers to record sales
in the general journal is Multiple Choice the retail price. the list price.
the original price. the net price. Merchandise is sold on credit for
$1,600 plus 6 percent sales tax. The journal entry to record the sale will
include a debit to Accounts Receivable for Multiple Choice $1,600.00.
$1,696.00. $2,560.00. $1,504.00. The balance due from an individual
customer can be found in: Multiple Choice the general journal. the
Sales account in the general ledger. the accounts receivable subsidiary
ledger. the Accounts Receivable account in the general ledger. The
entry to record a return by a credit customer of defective merchandise
on which no sales tax was charged includes Multiple Choice a debit to
Sales and a credit to Accounts Receivable. a debit to Accounts
Receivable and a credit to Sales Returns and Allowances. a debit to
Sales and a credit to Sales Returns and Allowances. a debit to Sales
Returns and Allowances and a credit to Accounts Receivable. On June
12, Music, Inc. sells $4,000 of goods on account to a credit customer
with credit terms of 1/10, n/30. If the customer pays on June 20, select
the entry to record the receipt of the customer’s payment: Multiple
Choice Cash 3,960 Sales Discounts 40 Accounts Receivable 4,000
________________________________________ • Cash 4,000
Accounts Receivable 4,000
________________________________________ Cash 4,000 Sales
Discounts 40 Accounts Receivable 3,960
________________________________________ Accounts Receivable
3,960 Sales Discounts 40 Cash 4,000

________________________________________ Which of the
following describes the Sales Returns and Allowances account? Multiple
Choice A contra expense account with a normal debit balance. An
expense account with a normal debit balance. A revenue account with
a normal credit balance. A contra revenue account with a normal debit
balance. Hugh Snow, the buyer, returned merchandise to Farley Co.,
the seller. The entry on the books of Farley company to record the
return of merchandise from Hugh Snow would include a: Multiple
Choice Debit to Account Receivable Debit to Accounts Payable Debit to
Sales Returns and Allowances Credit to Sales Returns and Allowances
Merchandise is sold for cash for $1,600 plus 6 percent sales tax. The
journal entry to record the sale will include Multiple Choice a debit to
Accounts Receivable for $1,600; a debit to Sales Tax Payable for $96
and a credit to Sales for $1,696. a debit to Cash for $1,600 and a credit
to Sales for $1,600. a debit to Cash for $1,696, a credit to Sales Tax
Payable for $96 and a credit to Sales for $1,600. a debit to Accounts
Receivable for $1,696 and a credit to Sales for $1,696. Sales Returns
and Allowances have the effect of Multiple Choice increasing expenses.
increasing assets. decreasing total revenue. increasing total revenue.
Kay Sadia sold merchandise for $7,200 subject to 8% sales tax. The
entry in the general journal to record the sale will include: Multiple
Choice a debit to Sales Tax Payable for $576.00. credit to Sales for
$7,200.00. a debit to Accounts Receivable for $7,200.00. a credit to
Sales for $7,776.00. On Deck Sports Memorabilia store sells a Babe
Ruth rookie card for $6,400 on account. If the sales tax on the sale is
8%, the journal entry to record the sale would include: Multiple Choice
a debit to Accounts Receivable for $6,912 a credit to Sales for $6,912 a
debit to Sales for $6,400 a debit to Sales Tax Payable for $512 A credit

policy that is too tight may result in Multiple Choice high level of losses
at the expense of increases in sales volume. high level of losses at the
expense of decreases in sales volume. low level of losses at the expense
of decreases in sales volume. low level of losses at the expense of
increases in sales volume. On Deck Sports Memorabilia store sells a
Babe Ruth rookie card for $6,400 on account. If the sales tax on the sale
is 8%, what is the amount debited to Accounts Receivable. Multiple
Choice $5,888 $6,912 $6,400 $6,512 A schedule of accounts receivable
is prepared Multiple Choice monthly. weekly. daily. yearly. All of the
following are situations that can cause accounts receivable to become
uncollectible, except Multiple Choice unexpected business
developments. errors of judgment. efficient business practices. in
financial data. Hugh Snow, the buyer, returned merchandise to Farley
Co., the seller. The entry on the books of Farley company to record the
return of merchandise from Hugh Snow would include a: Multiple
Choice debit to Sales Returns and Allowances and a credit to Account
Receivable. debit to Sales and a credit to Sales Returns and Allowances.
debit to Sales Discounts and a credit to Accounts Receivable. debit to
Accounts Payable and a credit to Sales Returns and Allowances. On
June 12, Candy Suppliers sells $5,000 of goods on account to a credit
customer with credit terms 1/10, n/30. Assume the sale is not subject
to tax. On June 15, the customer returned $500 of the goods due to
defect. Assume the customer pays within the discount period, select
the entry to record the receipt of the customer’s payment: Multiple
Choice Cash 4,455 Sales Discounts 45 Accounts Receivable 4,500
________________________________________ Cash 5,000 Accounts
Receivable 5,000 ________________________________________ Cash
4,950 Sales Discounts 50 Accounts Receivable 5,000

4,500 Sales Discounts 50 Cash 4,550
________________________________________ ___________ are
required to collect sales tax from customers, make periodic payments
to the taxing authority, and pay the taxes due when reports are filed.
Multiple Choice Manufacturers Wholesalers Retailers Distributors All of
the following are examples of the most common types of credit sales,
except Multiple Choice cards issued by credit card companies. business
credit cards. closed-account credit cards. bank credit cards. The Sales
account is classified as Multiple Choice a contra revenue account. an
asset account. a revenue account. a liability account. The entry to
record the return of merchandise from a customer on which sales tax
was charged includes Multiple Choice a debit to Sales Tax Payable. a
debit to Accounts Receivable. a credit to Sales Tax Payable. a credit to
Sales Returns and Allowances. If a firm had sales of $84,000 during a
period and sales returns and allowances of $6,000, its net sales were
Multiple Choice $6,000. $90,000. $84,000. $78,000. A retailer recorded
the following in June: cash sales $2,000; credit sales, $9,000; sales
returns and allowances, $1,000. Assuming the sales tax rate is 8
percent, the entry to record the sales tax payment includes a debit to
Sales Tax Payable for Multiple Choice $720. $880. $640. $800. A credit
policy that is too lenient may result in Multiple Choice increased sales
volume accompanied by a high level of losses. decreased sales volume
accompanied by a low level of losses. increased sales volume
accompanied by a low level of losses. decreased sales volume
accompanied by a high level of losses. On October 12, Equipment Inc.
sells $53,000 worth of equipment on account to a credit customer with
credit terms of 1/10, n/30. Assume the sale is not subject to tax. Select

the entry to record the sale on Oct 12. Multiple Choice Sales 53,000
Sales Discounts 530 Accounts Receivable 52,470
53,000 Sales Discounts 530 Sales 52,470
53,000 Sales 53,000 ________________________________________ •
Cash 53,000 Sales 53,000
________________________________________ A wholesale business
sells goods with a list price of $800 and a trade discount of 36 percent.
The net sales price is Multiple Choice $1,088.00. $512.00. $288.00.
$800.00. The Sales Returns and Allowances account is reported
Multiple Choice on the income statement as an addition to Sales. on
the balance sheet as a deduction from Capital. on the income
statement as a deduction from Sales. on the balance sheet as a
deduction from Accounts Receivable. Which of the following is a
common example of the distribution channel? Multiple Choice
Customer sells to Wholesaler who sells to Retailer who sells to
Wholesaler Manufacturer sells to Wholesaler who sells to Retailer who
sells to Customer Manufacturer sells to Customer who sells to
Wholesaler who sells to Retailer Manufacturer sells to Retailer who
sells to Wholesaler who sells to Customer Which of the following is not
one of the three basic types of businesses? Multiple Choice Service
Manufacturing International Merchandising
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due date Credit terms of 2/10, n/45 mean: Multiple Choice payment in
full is due 2 days after date of the invoice. • if the invoice is paid within
10 days of its date, a 2% discount may be taken; otherwise the total
amount is due in 35 days. • if the invoice is paid within 10 days of its
date, a 2% discount may be taken; otherwise the total amount is due in
45 days. • payment in full is due 45 days after date of the invoice with
no discount offered. Assuming a periodic inventory system is used, the
entry to record a return of merchandise purchased on credit would:
Multiple Choice • debit Purchases Returns and Allowances and credit
Accounts Receivable. • debit Purchases Returns and Allowances and
credit Purchases. • debit Purchases and credit Purchases Returns and
Allowances. • debit Accounts Payable and credit Purchases Returns and
Allowances. Assuming a periodic inventory system is used, freight
charges on merchandise purchases should be debited to: Multiple
Choice • the creditor’s account in the subsidiary ledger. • the Freight In
account. • the Purchases account. • the Accounts Payable account.
Which of the following statements is ? Multiple Choice • Purchases

Discounts is a contra expense account with a normal credit balance. •
Purchases Discounts is a revenue account with a normal credit balance.
• Purchases Discounts is an asset account with a normal credit balance.
• Purchases Discounts is an expense account with a normal debit
balance. Which of the following statements is ? Multiple Choice • The
person who ordered the goods should also authorize payment. •
Purchase requisitions do not need to be printed on pre-numbered
forms. • Calculations on an invoice are assumed to be if computer
generated. • Purchases should be made only after receiving proper
written authorization. On Oct 1, Jerry’s Lighting purchased merchandise
with a list price of $5,000 with credit terms of 1/10, n/30. On Oct 3,
Jerry’s returns $500 of the merchandise. Assuming a periodic inventory
system is used and Jerry’s pays the remaining amount owed on the
purchase within the discount period, Jerry’s journal entry to record the
payment, would include: Multiple Choice • a debit to Accounts
Receivable for $4,500. • a debit to Purchase Discounts for $45. • a debit
to Accounts Payable for $4,500. • a debit to Merchandise Inventory for
$45. When a payment is due is determined by the invoice date and the:
Multiple Choice • transportation schedule. • accounting cycle. • credit
terms. • delivery date. Which of the following statements is ? Multiple
Choice • The credit terms, 2/10, n/30, allow the customer to take a 2
percent discount if payment is made within 10 days of the invoice,
otherwise payment is due in full in 30 days. • The Purchases account is
reported as an asset on the balance sheet. • The purchase requisition is
the form sent to a supplier to order goods. • To the customer, a
supplier’s invoice is a sales invoice. The Purchases account is: Multiple
Choice • a subsidiary account. • a liability account. • a temporary
account. • a permanent account. Postings to the accounts payable

ledger should be made: Multiple Choice • daily. • monthly. • at the end
of the fiscal period. • weekly. Tune Tones Instrument Tuning Company
owes Mandy Lynn’s Music Studio $6,854 as of November 1. During
November, Tune Tones purchased merchandise from Mandy Lynn
totaling $9,548 and made payments on account to Mandy Lynn in the
amount of $7,250. The amount Tune Tones owes Mandy Lynn on
November 30 is: Multiple Choice • $4,556. • $9,152. • $9,548. • $6,854.
The total of the balances in the creditors’ accounts should agree with
the balance of: Multiple Choice • the Sales account in the general
ledger. • the Purchases account in the general ledger. • the Accounts
Receivable account in the general ledger. • the Accounts Payable
account in the general ledger. On Sept. 1, Jerry’s Lighting purchased
merchandise with a list price of $7,600 with credit terms of 1/10, n/30.
On Sept. 3, Jerry’s returns $900 of the merchandise. If payment is made
within the discount period, the total amount paid by Jerry’s Lighting is:
Multiple Choice • 7,600. • 6,633. • 6,700. • 7,524. The objective of
internal control of purchases is to: Multiple Choice • create more
organized invoices. • create a disciplined work environment. • make
the sales process more complex. • create written proof that purchases
and payments are authorized. Purchases is a temporary _______
account. Multiple Choice • liability • expense • revenue • asset Which
of the following accounts has a normal debit balance? Multiple Choice •
Accounts Payable • Sales • Purchases • Purchase Returns If a business
pays $1,100 on account to a creditor, the effect of the payment is a
decrease to cash and a: Multiple Choice • increase of capital. •
decrease to accounts payable. • decrease to accounts receivable. •
decrease to Fees Income. On April 5, Fair Coffee, Inc. purchased
merchandise with a list price of $1,000 and credit terms 2/10, n/30. On

April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair
Coffee uses a perpetual inventory system, their journal entry on April 5,
to record the purchase, would include: Multiple Choice • a debit to
Accounts Payable for $1,000. • a debit to Merchandise Inventory for
$1,000. • a credit to Merchandise Inventory for $16. • a debit to
Purchases for $1,000. When merchandise is ordered, the purchasing
department issues a form called: Multiple Choice • a purchase
requisition. • a sale invoice. • a purchase invoice. • a purchase order.
The total of the individual creditor accounts in the subsidiary ledger
must ________ the balance of the Accounts Payable control account.
Multiple Choice • be subtracted from • be greater than • be equal to •
be less than Assuming a periodic inventory system is used, the journal
entry to record the purchase of merchandise on account for $2,750
with freight of $125 prepaid and added to the invoice is: Multiple
Choice • debit Purchases $2,750; credit Accounts Payable $2,750. •
debit Accounts Payable $2,875, credit Freight in $125; credit Purchases
$2,750. • debit Accounts Receivable $2,875; credit Sales $2,875. • debit
Purchases $2,750, debit Freight In $125; credit Accounts Payable
$2,875. The source document for recording a purchase of merchandise
on credit is: Multiple Choice • the purchase invoice. • the purchase
order. • the purchase requisition. • the receiving report. On April 5, Fair
Coffee, Inc. purchased merchandise with a list price of $1,000 and
credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the
merchandise. Assuming Fair Coffee uses a perpetual inventory system,
the journal entry on April 6, to record the return, would be: DEBIT
CREDIT A) Accounts Payable 200 Cash 200 B) Accounts Payable 200
Purchase Returns and Allowances 200 C) Purchase Returns and
Allowances 200 Accounts Payable 200 D) Accounts Payable 200

Merchandise Inventory 200
________________________________________ Multiple Choice •
Option B. • Option D. • Option A. • Option C. On Jan. 3, Gourmet Cakes
sold $15,000 of merchandise, on account with terms 2/10, n/30, to
Jerry Hines. Assuming that the original cost of the merchandise to
Gourmet Cakes was $4,000 and the perpetualinventory system is used,
the journal entry on Jan. 3, to record the sale, would be: DEBIT CREDIT
A) Sales 15,000 Accounts Receivable/J.Hines 15,000 B) Accounts
Receivable/J.Hines 15,000 Sales 15,000 Cost of Goods Sold 4,000
Merchandise Inventory 4,000 C) Accounts Payable/J.Hines 15,000 Sales
15,000 Merchandise Inventory 4,000 Cost of Goods Sold 4,000 D)
Accounts Receivable/J.Hines 15,000 Sales 11,000 Cost of Goods Sold
4,000 ________________________________________ Multiple Choice
• Option C. • Option D. • Option A. • Option B. During March a firm
purchased $22,650 of merchandise and paid freight charges of $1,720.
If the net delivered cost of purchases for the March is $21,900, what is
the total purchase returns for March? Multiple Choice • $970 • $3,440
• $0 • $2,470 The amount of the purchases for a period is presented in:
Multiple Choice • the Revenue section of the income statement. • the
Liabilities section of the balance sheet. • the Operating Expenses
section of the income statement. • the Cost of Goods Sold section of
the income statement. Assuming a periodic inventory system, the
journal entry to record the purchase on account of $900 of
merchandise with freight of $65 prepaid and added to the invoice is:
Multiple Choice • debit Purchases $965; credit Accounts Payable $965.
• debit Accounts Payable $965, debit Freight in $65; credit Purchases
$900. • debit Purchases $900, debit Freight in $65; credit Accounts
Payable $965. • debit Accounts Receivable $965; credit Sales $965. A

firm had purchases of $18,400, freight charges of $600, and purchases
returns and allowances of $850 during one month. Its net delivered
cost of purchases was: Multiple Choice • $18,650. • $18,150. • $19,850.
• $16,950. During the year, a firm purchased $256,900 of merchandise
and paid freight charges of $36,870. If the total purchases returns and
allowances were $13,690 and purchase discounts were $9,160 for the
year, what is the net delivered cost of purchases? Multiple Choice •
$197,180 • $298,300 • $270,920 • $289,240 Assuming a periodic
inventory system is used, the entry to record a purchase of
merchandise on credit includes: Multiple Choice • a debit to Accounts
Payable and a credit to Purchases. • a debit to Purchases and a credit to
Accounts Receivable. • a credit to Purchases and a credit to Accounts
Payable. • a debit to Purchases and a credit to Accounts Payable. On
Sept. 1, Jerry’s Lighting purchased merchandise with a list price of
$12,500 with credit terms of 3/5, n/60. On Sept. 3, Jerry’s returns
$1,300 of the merchandise. If payment is made within the discount
period, the total amount paid by Jerry’s Lighting is: Multiple Choice •
11,200. • 12,125. • 10,864. • 10,640. Assuming a periodic inventory
system is used, identify the statement below that is ? Multiple Choice •
Freight charges that are listed on the invoice received from a supplier
are not part of the total credit to Accounts Payable to record the credit
purchase. • Another name that may be used for the Freight In account
is “Transportation In.” • Freight In is subtracted from Purchases to
arrive at delivered cost of purchases. • None of these statements are .
Freight – In is a(n) _________ account. Multiple Choice • revenue •
liability • expense • asset On April 5, Fair Coffee, Inc. purchased

Coffee uses a perpetual inventory system, the journal entry on April 13,
to record the payment of the amount owed, would be: DEBIT CREDIT A)
Accounts Payable 1,000 Cash 1,000 B) Accounts Reveivable 1,000 Sales
Discounts 16 Cash 984 C) Accounts Payable 800 Merchandise Inventory
16 Cash 784 D) Accounts Payable 800 Purchase Discounts 16 Cash 784
________________________________________ Multiple Choice •
Option D. • Option A. • Option B. • Option C.
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due date. Assuming a periodic inventory system is used, freight charges
on merchandise purchases should be debited to: Multiple Choice the

creditor’s account in the subsidiary ledger. the Freight In account. the
Purchases account. the Accounts Payable account. Which of the
following statements is ? Multiple Choice Purchases Discounts is a
contra expense account with a normal credit balance. Purchases
Discounts is a revenue account with a normal credit balance. Purchases
Discounts is an asset account with a normal credit balance. Purchases
Discounts is an expense account with a normal debit balance. Which of
the following statements is ? Multiple Choice The person who ordered
the goods should also authorize payment. Purchase requisitions do not
need to be printed on pre-numbered forms. Calculations on an invoice
are assumed to be if computer generated. Purchases should be made
only after receiving proper written authorization. On Oct 1, Jerry’s
Lighting purchased merchandise with a list price of $5,000 with credit
terms of 1/10, n/30. On Oct 3, Jerry’s returns $500 of the merchandise.
Assuming a periodic inventory system is used and Jerry’s pays the
remaining amount owed on the purchase within the discount period,
Jerry’s journal entry to record the payment, would include: Multiple
Choice a debit to Accounts Receivable for $4,500. a debit to Purchase
Discounts for $45. a debit to Accounts Payable for $4,500. a debit to
Merchandise Inventory for $45. When a payment is due is determined
by the invoice date and the: Multiple Choice transportation schedule.
accounting cycle. credit terms. delivery date. Which of the following
statements is ? Multiple Choice The credit terms, 2/10, n/30, allow the
customer to take a 2 percent discount if payment is made within 10
days of the invoice, otherwise payment is due in full in 30 days. The
Purchases account is reported as an asset on the balance sheet. The
purchase requisition is the form sent to a supplier to order goods. To
the customer, a supplier’s invoice is a sales invoice. The Purchases

account is: Multiple Choice a subsidiary account. a liability account. a
temporary account. a permanent account. Postings to the accounts
payable ledger should be made: Multiple Choice daily. monthly. at the
end of the fiscal period. weekly. Tune Tones Instrument Tuning
Company owes Mandy Lynn’s Music Studio $6,854 as of November 1.
During November, Tune Tones purchased merchandise from Mandy
Lynn totaling $9,548 and made payments on account to Mandy Lynn in
the amount of $7,250. The amount Tune Tones owes Mandy Lynn on
November 30 is: Multiple Choice $4,556. $9,152. $9,548. $6,854. The
total of the balances in the creditors’ accounts should agree with the
balance of: Multiple Choice the Sales account in the general ledger. the
Purchases account in the general ledger. the Accounts Receivable
account in the general ledger. the Accounts Payable account in the
general ledger. On Sept. 1, Jerry’s Lighting purchased merchandise with
a list price of $7,600 with credit terms of 1/10, n/30. On Sept. 3, Jerry’s
returns $900 of the merchandise. If payment is made within the
discount period, the total amount paid by Jerry’s Lighting is: Multiple
Choice 7,600. 6,633. 6,700. 7,524. The objective of internal control of
purchases is to: Multiple Choice create more organized invoices. create
a disciplined work environment. make the sales process more complex.
create written proof that purchases and payments are authorized.
Purchases is a temporary _______ account. Multiple Choice liability
expense revenue asset Which of the following accounts has a normal
debit balance? Multiple Choice Accounts Payable Sales Purchases
Purchase Returns If a business pays $1,100 on account to a creditor, the
effect of the payment is a decrease to cash and a: Multiple Choice
increase of capital. decrease to accounts payable. decrease to accounts
receivable. decrease to Fees Income. On April 5, Fair Coffee, Inc.

purchased merchandise with a list price of $1,000 and credit terms
2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise.
Assuming Fair Coffee uses a perpetual inventory system, their journal
entry on April 5, to record the purchase, would include: Multiple Choice
a debit to Accounts Payable for $1,000. a debit to Merchandise
Inventory for $1,000. a credit to Merchandise Inventory for $16. a debit
to Purchases for $1,000. When merchandise is ordered, the purchasing
department issues a form called: Multiple Choice a purchase
requisition. a sale invoice. a purchase invoice. a purchase order. The
total of the individual creditor accounts in the subsidiary ledger must
________ the balance of the Accounts Payable control account.
Multiple Choice be subtracted from be greater than be equal to be less
than Assuming a periodic inventory system is used, the journal entry to
record the purchase of merchandise on account for $2,750 with freight
of $125 prepaid and added to the invoice is: Multiple Choice debit
Purchases $2,750; credit Accounts Payable $2,750. debit Accounts
Payable $2,875, credit Freight in $125; credit Purchases $2,750. debit
Accounts Receivable $2,875; credit Sales $2,875. debit Purchases
$2,750, debit Freight In $125; credit Accounts Payable $2,875. The
source document for recording a purchase of merchandise on credit is:
Multiple Choice the purchase invoice. the purchase order. the purchase
requisition. the receiving report. On April 5, Fair Coffee, Inc. purchased
Coffee uses a perpetual inventory system, the journal entry on April 6,
to record the return, would be: DEBIT CREDIT A) Accounts Payable 200
Cash 200 B) Accounts Payable 200 Purchase Returns and Allowances
200 C) Purchase Returns and Allowances 200 Accounts Payable 200 D)

Accounts Payable 200 Merchandise Inventory 200
________________________________________ Multiple Choice
Option B. Option D. Option A. Option C. On Jan. 3, Gourmet Cakes sold
$15,000 of merchandise, on account with terms 2/10, n/30, to Jerry
Hines. Assuming that the original cost of the merchandise to Gourmet
Cakes was $4,000 and the perpetualinventory system is used, the
journal entry on Jan. 3, to record the sale, would be: DEBIT CREDIT A)
Sales 15,000 Accounts Receivable/J.Hines 15,000 B) Accounts
Receivable/J.Hines 15,000 Sales 15,000 Cost of Goods Sold 4,000
Merchandise Inventory 4,000 C) Accounts Payable/J.Hines 15,000 Sales
15,000 Merchandise Inventory 4,000 Cost of Goods Sold 4,000 D)
Accounts Receivable/J.Hines 15,000 Sales 11,000 Cost of Goods Sold
4,000 ________________________________________ Multiple Choice
Option C. Option D. Option A. Option B. During March a firm purchased
$22,650 of merchandise and paid freight charges of $1,720. If the net
delivered cost of purchases for the March is $21,900, what is the total
purchase returns for March? Multiple Choice $970 $3,440 $0 $2,470
The amount of the purchases for a period is presented in: Multiple
Choice the Revenue section of the income statement. the Liabilities
section of the balance sheet. the Operating Expenses section of the
income statement. the Cost of Goods Sold section of the income
statement. Assuming a periodic inventory system, the journal entry to
record the purchase on account of $900 of merchandise with freight of
$65 prepaid and added to the invoice is: Multiple Choice debit
Purchases $965; credit Accounts Payable $965. debit Accounts Payable
$965, debit Freight in $65; credit Purchases $900. debit Purchases
$900, debit Freight in $65; credit Accounts Payable $965. debit
Accounts Receivable $965; credit Sales $965. Assuming a periodic

inventory system is used, the entry to record a purchase of
merchandise on credit includes: Multiple Choice a debit to Accounts
Payable and a credit to Purchases. a debit to Purchases and a credit to
Accounts Receivable. a credit to Purchases and a credit to Accounts
Payable. a debit to Purchases and a credit to Accounts Payable. On
Sept. 1, Jerry’s Lighting purchased merchandise with a list price of
$12,500 with credit terms of 3/5, n/60. On Sept. 3, Jerry’s returns
$1,300 of the merchandise. If payment is made within the discount
period, the total amount paid by Jerry’s Lighting is: Multiple Choice
11,200. 12,125. 10,864. 10,640. Assuming a periodic inventory system
is used, identify the statement below that is ? Multiple Choice Freight
charges that are listed on the invoice received from a supplier are not
part of the total credit to Accounts Payable to record the credit
purchase. Another name that may be used for the Freight In account is
“Transportation In.” Freight In is subtracted from Purchases to arrive at
delivered cost of purchases. None of these statements are . Freight – In
is a(n) _________ account. Multiple Choice revenue liability expense
asset On April 5, Fair Coffee, Inc. purchased merchandise with a list
price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee
returns $200 of the merchandise. Assuming Fair Coffee uses a
perpetual inventory system, the journal entry on April 13, to record the
payment of the amount owed, would be: DEBIT CREDIT A) Accounts
Payable 1,000 Cash 1,000 B) Accounts Reveivable 1,000 Sales Discounts
16 Cash 984 C) Accounts Payable 800 Merchandise Inventory 16 Cash
784 D) Accounts Payable 800 Purchase Discounts 16 Cash 784
________________________________________ Multiple Choice
Option D. Option A. Option B. Option C.
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due date Which of the following statements is not correct? Multiple
Choice • In accounting, the term “cash” includes checks, money orders,
and funds on deposit in a bank as well as currency and coins. • In a well
managed business, most bills are paid by cash. • The cash register proof
is used to enter the cash sales and sales tax in the journal. • The petty
cash account balance is usually listed separately from the Cash account
on the Balance Sheet. Most businesses use the petty cash fund to pay
for Multiple Choice • internal expenses. • accounts payable. • small
expenditures. • merchandise purchases. Which of the following
statements is correct? Multiple Choice • An endorsement is a written
authorization that transfers ownership of a check. • If a check is
negotiable, it means that ownership cannot be transferred. • A check is
a written order signed by an authorized person, the drawee. • Most
businesses make one monthly deposit of cash receipts in order to

maintain better control over their cash. The entry to replenish a petty
cash fund typically includes Multiple Choice • a debit to Cash and a
credit to Petty Cash. • debits to various asset and expense accounts and
a credit to Cash. • debits to various expense accounts and a credit to
Petty Cash Fund. • a debit to Petty Cash Fund and a credit to Cash. ABC
Office Suppliers keeps a $200 change fund in its cash register. The cash
sales per the cash register tape on May 30 were $700. The cash count
was $908. Identify the correct journal entry below to record the sales
and cash overage (or shortage) for May 30. DEBIT CREDIT (A) Cash 700
Cash Short or Over 8 Sales 708 (B) Cash 700 Sales 700 (C) Cash 708 Cash
Short or Over 8 Sales 700 (D) Cash 908 Sales 900 Cash Short or Over 8
________________________________________ Multiple Choice •
Option A. • Option B. • Option C. • Option D. The most appropriate
form of endorsement of a check for business purposes is Multiple
Choice • the blank endorsement. • the full endorsement. • the
restrictive endorsement. • no endorsement. To arrive at an accurate
balance on a bank reconciliation statement, a service charge should be
Multiple Choice • added to the bank statement balance. • deducted
from the book balance. • deducted from the bank statement balance. •
added to the book balance. A check issued for $890 to pay a vendor on
account was recorded in the firm’s records as $980; the canceled check
was properly listed on the bank statement at $890. To arrive at an
accurate balance on a bank reconciliation statement, the error should
be Multiple Choice • added to the bank statement balance. • deducted
from the bank statement balance. • added to the book balance. •
deducted from the book balance. A check issued for $1,980 to pay a
vendor on account was recorded in the firm’s records as $1,890; the
canceled check was properly listed on the bank statement at $1,980. To

arrive at an accurate balance on a bank reconciliation statement, the
error should be Multiple Choice • added to the bank statement
balance. • deducted from the book balance. • deducted from the bank
statement balance. • added to the book balance. The bank statement
did not show a check for $630 that was written and recorded by the
company during the month. The journal entry needed for this
reconciling item includes: Multiple Choice • a debit to cash. • a credit to
Accounts Payable. • a credit to Cash. • no journal entry is required for
the reconciling item.
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due date. The bank statement did not show a check for $630 that was
written and recorded by the company during the month. The journal
entry needed for this reconciling item includes: Multiple Choice • a
credit to Accounts Payable. • no journal entry is required for the
reconciling item. • a debit to cash. • a credit to Cash. Included with its
bank statement a firm may receive a credit memorandum, which could
indicate Multiple Choice • a fee for printing new business checks. • a
bank service charge deducted from the firm’s account balance. • an
addition to the firm’s account balance because the bank collected the
amount due on a promissory note from a customer of the firm. • the
bank’s return of a dishonored (NSF) check that was issued by a credit
customer of the firm. A firm appropriately wrote a check for $78 but
entered the amount as payment of $87 in its records. On a bank
reconciliation statement this error would be shown as Multiple Choice
• a deduction of $9 from the book balance. • an addition of $9 to the
book balance. • a deduction of $9 from the bank statement balance. •
an addition of $9 to the bank statement balance. Which of the
following is not a reason why the book balance of cash may not agree
with the balance on the bank statement? Multiple Choice •
Outstanding checks • End of the month • Service charges and other
deductions • Deposit in transit The bank statement did not show a
deposit of $850 that had been recorded by the firm. The journal entry
needed for this reconciling item includes: Multiple Choice • a credit to
Accounts Receivable. • a credit to Cash. • no journal entry is required
for the reconciling item. • a debit to cash. The bank statement showed
an NSF check from a customer, which the company listed as a
reconciling item on the bank reconciliation statement. The journal entry
needed for this reconciling item includes: Multiple Choice • a debit to

NSF Expense. • a debit to cash. • a credit to Cash. • a credit to Accounts
Receivable. To arrive at an accurate balance on a bank reconciliation
statement, a service charge should be Multiple Choice • added to the
bank statement balance. • deducted from the book balance. •
deducted from the bank statement balance. • added to the book
balance. On March 30, a firm’s bank reconciliation statement shows a
book balance of $31,640, an NSF check of $800, and a service charge of
$40. The journal entry on March 30 to record these items would be:
DEBIT CREDIT (A) Accounts Receivable 800 Bank Fees Expense 40 Cash
840 (B) Cash 840 Bank Fees Expense 40 NSF Expense 800 (C)
Miscellaneous Expenses 840 Cash 840 (D) Cash 840 Accounts
Receivable 800 Bank Fees Expense 40
________________________________________ Multiple Choice •
Option A. • Option B. • Option D. • Option C. On April 1, Java Brewers
created a petty cash fund starting with $100. On April 30, there was
only $5 remaining in the petty cash box. The custodian of the fund
presented vouchers to the company accountant for Supplies of $55 and
Delivery Expenses of $40. The journal entry on April 30, to replenish the
fund, would be: DEBIT CREDIT (A) Petty Cash 95 Cash 95 (B) Cash 95
Petty Cash 95 (C) Delivery Expenses 40 Supplies 55 Petty Cash 95 (D)
Delivery Expenses 40 Supplies 55 Cash 95
________________________________________ rev:
11_01_2017_QC_CS-107838, 11_06_2017_QC_CS-108303 Multiple
Choice • Option A. • Option D. • Option C. • Option B. A check issued
for $890 to pay a vendor on account was recorded in the firm’s records
as $980; the canceled check was properly listed on the bank statement
at $890. To arrive at an accurate balance on a bank reconciliation
statement, the error should be Multiple Choice • deducted from the

bank statement balance. • added to the bank statement balance. •
added to the book balance. • deducted from the book balance. A check
issued for $890 to pay a vendor on account was recorded in the firm’s
records as $980; the canceled check was properly listed on the bank
statement at $890. The journal entry for this reconciling item would
include: Multiple Choice • a debit to Accounts Payable for $90. • a debit
to cash for $90. • a debit to Cash for $890. • a credit to Accounts
Payable for $890. During the month a company paid $54.75 for office
supplies and $63.22 for miscellaneous expenses from the petty cash
fund. The entry to replenish the petty cash fund at the end of the
month would include Multiple Choice • a debit to Cash for $117.97. • a
credit to Office Supplies for $54.75. • a debit to Petty Cash for $117.97.
• a credit to Cash for $117.97. On August 3, Marley’s Sporting Goods
accepted a six-month promissory note from J.J. Brown, who owed $490
on account. (J. J. had needed more time to pay his balance.) The
promissory note had a 10 percent interest rate. The journal entry on
August 3 to record the transaction would be: DEBIT CREDIT (A) Notes
Receivable 490 Accounts Receivable 490 (B) Cash 490 Notes Receivable
490 (C) Cash 490 Accounts Receivable 490 (D) Accounts Receivable 490
Notes Receivable 490 ________________________________________
Multiple Choice • Option B. • Option D. • Option C. • Option A. Which
of the following would not be shown as an adjustment to the book
balance on a bank reconciliation statement? Multiple Choice • Bank
service charges • Deposits in transit • NSF checks • A charge for
printing new checks The bank statement showed a non-interest bearing
note receivable from a customer that was collected by the bank, which
the company listed as a reconciling item on the bank reconciliation
statement. The journal entry needed for this reconciling item includes:

Multiple Choice • a debit to Accounts Receivable. • a credit to Cash. • a
credit to Interest Income. • a debit to cash. Which of the following
statements is ? Multiple Choice • An endorsement is a written
authorization that transfers ownership of a check. • A check is a written
order signed by an authorized person, the drawee. • Most businesses
make one monthly deposit of cash receipts in order to maintain better
control over their cash. • If a check is negotiable, it means that
ownership cannot be transferred. George’s Grocers keeps a $100
change fund in its cash register. The cash sales per the cash register
tape on January 30 were $405. The cash count was $502. Identify the
journal entry below to record the sales and cash overage (or shortage)
for January 30. DEBIT CREDIT (A) Cash 402 Cash Short or Over 3 Sales
405 (B) Cash 502 Sales 502 (C) Sales 505 Cash Short or Over 3 Cash 502
(D) Cash 405 Sales 405
________________________________________ Multiple Choice •
Option D. • Option A. • Option B. • Option C. If a check written by a
firm is not canceled by the bank and returned with the month’s bank
statement, the firm should Multiple Choice • consider this check as
outstanding when preparing the bank reconciliation. • adjust the
balance in the firm’s checkbook to reflect the data that appears in the
bank’s records. • immediately notify the bank requesting that it its
records. • make no adjustment when preparing the bank reconciliation.
The journal entry to record the collection of the amount due on an
interest-bearing promissory note from a customer would debit Cash,
credit Notes Receivable, and Multiple Choice • debit Interest Income. •
credit Interest Expense. • credit Interest Income. • debit Interest
Expense. To arrive at an accurate balance on a bank reconciliation
statement, deposits in transit should be Multiple Choice • deducted

from the book balance. • deducted from the bank statement balance. •
added to the bank statement balance. • added to the book balance.
Most businesses use the petty cash fund to pay for Multiple Choice •
merchandise purchases. • small expenditures. • internal expenses. •
accounts payable. Identify the items below that would all appear as an
addition or subtraction from the Book Balance side of a bank
reconciliation statement. Multiple Choice • Deposits in transit, bank
service charges. • Outstanding checks, customer NSF check. • Bank
service charges, customer NSF check. • Outstanding checks, deposits in
transit. Of the four categories listed in a bank reconciliation, which
one(s) require a journal entry(ies) in the firm’s records? Multiple Choice
• Bank Statement Balance Deductions and Book Balance of Cash
Deductions • Bank Statement Balance Additions and Book Balance of
Cash Additions • Book Balance of Cash Additions and Book Balance of
Cash Deductions • Bank Statement Balance Additions and Bank
Statement Balance Deductions To arrive at an accurate balance on a
bank reconciliation statement, a credit memorandum from the bank for
the collection of a note and interest should be Multiple Choice •
deducted from the bank statement balance. • added to the bank
statement balance. • deducted from the book balance. • added to the
book balance. A check issued for $785 to pay a vendor on account was
recorded in the firm’s records as $758; the canceled check was properly
listed on the bank statement at $785. The journal entry for this
reconciling item would include: Multiple Choice • a debit to cash for
$785. • a debit to Accounts Payable for $758. • a credit to Accounts
Payable for $27. • a credit to Cash for $27. Which of the following
statements is not ? Multiple Choice • The petty cash account balance is
usually listed separately from the Cash account on the Balance Sheet. •

In a well managed business, most bills are paid by cash. • In accounting,
the term “cash” includes checks, money orders, and funds on deposit in
a bank as well as currency and coins. • The cash register proof is used
to enter the cash sales and sales tax in the journal. To arrive at an
accurate balance on a bank reconciliation statement, a debit
memorandum for a customer check marked NSF should be Multiple
Choice • added to the book balance. • deducted from the bank
statement balance. • deducted from the book balance. • added to the
bank statement balance. A check issued for $1,980 to pay a vendor on
account was recorded in the firm’s records as $1,890; the canceled
check was properly listed on the bank statement at $1,980. To arrive at
an accurate balance on a bank reconciliation statement, the error
should be Multiple Choice • added to the book balance. • added to the
bank statement balance. • deducted from the bank statement balance.
• deducted from the book balance. To arrive at an accurate balance on
a bank reconciliation statement, outstanding checks should be Multiple
Choice • added to the bank statement balance. • deducted from the
book balance. • added to the book balance. • deducted from the bank
statement balance. The entry to replenish a petty cash fund typically
includes Multiple Choice • debits to various asset and expense accounts
and a credit to Cash. • debits to various expense accounts and a credit
to Petty Cash Fund. • a debit to Cash and a credit to Petty Cash. • a
debit to Petty Cash Fund and a credit to Cash.
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due date. Identify the statement below that is true regarding the
Allowance for Doubtful Accounts account. Multiple Choice • The
account has a normal credit balance and is reported on the balance
sheet. • The account has a normal debit balance and is reported on the
balance sheet. • The account has a normal credit balance and is
reported on the income statement. • The account has a normal debit
balance and is reported on the income statement. On June 1, 2019,
Mighty Fast Flooring issued a 10-month, 9 percent note for $5,000. The
note was recorded in the Notes Payable-Trade account. The adjusting
entry on December 31 to record the interest accrued (owed) on the
note is: Multiple Choice • a debit to Interest Expense for $450.00 and a
credit to Interest Payable for $450.00. • a debit to Interest Income for
$450.00 and a credit to Interest Receivable for $450.00. • a debit to
Interest Expense for $262.50 and a credit to Interest Payable for
$262.50. Correct • a debit to Interest Expense for $262.50 and a credit
to Notes Payable-Trade for $262.50. On January 1, 2019, a firm
purchased machinery for $19,000. Depreciation expense for the year

ending December 31, 2019, given the straight-line method, a 8-year
useful life, and a salvage value of $2,000, is Multiple Choice • $2,125. •
$2,000. • $2,375. • $2,400. Which of the following statements is
correct? Multiple Choice • Income that has been earned but not yet
received is called accrued income. • Unearned Subscription Income is a
liability account. • Under the accrual basis of accounting, revenue is
recognized and recorded in the period when it is earned regardless of
when cash related to the transaction is received. • All of these
statements are correct. On November 1, 2019, a firm accepted a 5-
month, 10 percent note for $1,200 from a customer with an overdue
balance. The accrued interest recorded for this note for the year ended
December 31, 2019, is Multiple Choice • $120. • $60. • $20. • $10.
Hugh Morris Company pays weekly wages of $15,000 every Friday for a
five day week ending on that day. If the last day of the year is on
Tuesday, the adjusting entry to record the accrued wages is: Multiple
Choice • debit Wages Expense $6,000; credit Wages Payable $6,000 •
debit Wages Expense $15,000; credit Cash $15,000 • debit Wages
Expense $9,000; credit Wages Payable $9,000 • debit Wages Expense
$6,000; credit Drawing $6,000 Robin Banks, Inc. owns an armored truck
which was purchased for $80,000. The Accumulated Depreci¬ation on
the truck is $55,000. The book value of the armored truck is Multiple
Choice • $25,000. • $80,000. • $55,000. • $135,000. The trial balance of
Premier Lighting Co. shows Merchandise Inventory of $35,000. The
company uses the periodic inventory system. Based on a count taken
on December 31, merchandise inventory at the end of the year actually
totaled $28,000. The adjusting entry to remove the old merchandise
inventory balance would be: Multiple Choice • a debit to Income
Summary of $28,000 and a credit to Merchandise Inventory for

$28,000. • a debit to Merchandise Inventory of $28,000 and a credit to
Income Summary for $28,000. • a debit to Purchases of $35,000 and a
credit to Merchandise Inventory for $35,000. • a debit to Income
$35,000. Stan Still Stationery Store’s employees are paid every Friday
for a five day work week and are paid a total of $1,625 per day. If
December 31, 2019, is on a Tuesday, the amount of the adjusting entry
for accrued wages is: Multiple Choice • $1,625 • $4,875 • $3,250 •
$8,125 Depreciation Expense has a debit balance in the Trial Balance
section of the worksheet of $2,200 and a debit of $200 in the
adjustments section of the worksheet, the balance of Depreciation
Expense in the Adjusted Trial Balance section of the worksheet is a
Multiple Choice • $2,400 credit. • $200 debit. • $2,000 debit. • $2,400
debit.
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due date. Rose Bush Nursery purchased a delivery truck for $40,000.
The truck is expected to have a useful life of 5 years and a residual
value of $2,800. The company uses the straight-line method of
depreciation. If the truck was purchased on June 1, 2019, what is the
amount of depreciation expense for the truck for the year ended
December 31, 2019? Multiple Choice • $2,800 • $3,100 • $7,440 •
$4,340 The ending merchandise inventory is recorded on the
worksheet in the Multiple Choice • Income Statement Debit column
only. • Income Statement Credit column only. • Income Statement
Credit and the Balance Sheet Debit columns. • Balance Sheet Debit
column only. After both of the entries for the inventory adjustment
have been posted, the debit in the Income Summary account
represents: Multiple Choice • Beginning Inventory • Net Income •
Ending Inventory • Cost of Goods Sold An adjusting entry is usually not
required for a revenue item when it is Multiple Choice • earned,
recorded and paid for by the customer in one period. • paid for by the
customer and recorded in one period but not fully earned until a later
period. • earned in one period but not paid for by the customer or
recorded until a later period. • budgeted, paid for, and partially earned
in one period but not fully earned until a later period. On December 1,
2019, a firm accepted a 6-month, 12 percent note for $10,000 from a
customer. The adjusting entry on December 31 to record the interest

earned on the note is: Multiple Choice • a debit to Interest Receivable
for $600 and a credit to Interest Income for $600. • a debit to Interest
Income for $100 and a credit to Interest Receivable for $100. • a debit
to Interest Receivable for $1,200 and a credit to Interest Income for
$1,200. • a debit to Interest Receivable for $100 and a credit to Interest
Income for $100. Which of the following statements is correct?
Multiple Choice • On the worksheet, the amount of the ending
merchandise inventory is shown in the Income Statement Credit
column in the account Income Summary and the Balance Sheet Debit
column in the account Merchandise Inventory. • All of these
statements are correct. • On the worksheet, the totals of the Income
Statement columns should equal the totals of the Balance Sheet
columns. • On the worksheet, if debits exceed credits in the Adjusted
Trial Balance section, the difference represents a net loss. Allowance
for Doubtful Accounts is reported in the Multiple Choice • Assets
section of the balance sheet. • Liabilities section of the balance sheet. •
Cost of Goods Sold section of the income statement. • Operating
Expenses section of the income statement. During the year, Spirit Fun
had net credit sales of $800,000. Past experience shows that 1.5
percent of the firm’s net credit sales will be uncollectible. Determine
the adjusting entry needed to recognize the estimated expense for
these uncollectible accounts. Multiple Choice • debit Allowance for
Doubtful Accounts $12,000 and credit Accounts Receivable $12,000. •
debit Uncollectible Accounts Expense $12,000 and credit Allowance for
Doubtful Accounts $12,000. • debit Uncollectible Accounts Expense
$12,000 and credit Accounts Receivable $12,000. • debit Uncollectible
Accounts Expense $120,000 and credit Allowance for Doubtful
Accounts $120,000. On January 2, 2019, a firm purchased equipment

for $10,000. Depreciation expense for the year ending December 31,
2019, given the straight-line method, a 5-year useful life, and a salvage
value of $1,200, is Multiple Choice • $1,760. • $2,000. • $1,800. •
$1,400. Millie’s Bakery employees earn $4,500 a week for a five-day
work week and are paid every Friday. If December 31 falls on a
Wednesday, calculate the amount that is owed and select the adjusting
entry needed to record the owed but unpaid salaries as of December
31. Multiple Choice • a debit to Salaries Expense for $4,500 and a credit
to Salaries Payable for $4,500. • a debit to Salaries Expense for $2,700
and a credit to Salaries Payable for $2,700. • a debit to Income
Summary for $2,700 and a credit to Salaries Payable for $2,700. • a
debit to Salaries Payable for $900 and a credit to Salaries Expense for
$900. If an account has a credit balance of $2,200 in the Trial Balance
section of a worksheet and there is a credit of $400 in the Adjustments
section, the account balance in the Adjusted Trial Balance section of the
worksheet is Multiple Choice • $2,600 credit. • $1,800 debit. • $2,600
debit. • $1,800 credit. The trial balance of Marley Motorcycles shows
Merchandise Inventory of $80,000. Based on a count taken on
December 31, merchandise inventory at the end of the year actually
totaled $92,000. The company uses a periodic inventory system. The
adjusting entry to record the new merchandise inventory balance
would be: Multiple Choice • a debit to Merchandise Inventory of 80,000
and a credit to Income Summary for $80,000. • a debit to Purchases of
$92,000 and a credit to Income Summary for $92,000. • a debit to
Merchandise Inventory of $92,000 and a credit to Income Summary for
Purchases for $12,000. Identify the statement below that is true
regarding the Allowance for Doubtful Accounts account. Multiple

Choice • The account has a normal debit balance and is reported on the
balance sheet. • The account has a normal credit balance and is
reported on the balance sheet. • The account has a normal debit
balance and is reported on the income statement. • The account has a
normal credit balance and is reported on the income statement. Which
of the following statements is not correct? Multiple Choice • If a firm
records prepaid expense items in an expense account when they pay
for them, their adjustment at the end of the period to record the
unexpired portion would include a debit to an asset account and a
credit to an expense account. • Each adjustment for an accrued
expense includes a credit to a liability account. • The cost less the
salvage value equals the depreciable base of a long-term asset. •
Uncollectible Accounts Expense is a contra asset account. With the
accrual basis of accounting, revenue from a credit sale is recognized
Multiple Choice • each time a payment on an account balance is
received. • on the date the account is collected in full. • on the date of
the sale. • either on the date of the sale or when the amount of the
sale is collected. The net income for an accounting period can be
determined using the worksheet by comparing the balances and
determining the difference between the balances in the two Multiple
Choice • Balance Sheet and Income Statement Debit columns. •
Balance Sheet and Income Statement Credit columns. • Income
Statement or Balance Sheet columns. • Income Statement columns
only. Stan Still Stationery Store’s employees are paid every Friday for a
five day work week and are paid a total of $1,625 per day. If December
31, 2019, is on a Tuesday, the amount of the adjusting entry for
accrued wages is: Multiple Choice • $4,875 • $3,250 • $8,125 • $1,625
Allowance for Doubtful Accounts is Multiple Choice • added to

Accounts Receivable in the Assets section of the balance sheet. • listed
in the Operating Expenses section of the income statement. • deducted
from Sales in the Revenue section of the income statement. •
subtracted from Accounts Receivable in the Asset section of the
balance sheet. Accrued income is income that has been Multiple Choice
• earned and received. • budgeted for the fiscal period. • received but
not earned. • earned but not received. If an account has a debit
balance of $2,000 in the Trial Balance section of a worksheet and there
is a credit of $600 in the Adjustments section, the account balance in
the Adjusted Trial Balance section of the worksheet is a Multiple Choice
• $1,400 debit. • $1,400 credit. • $600 credit. • $2,600 debit. The net
income for an accounting period appears on the worksheet in the
Multiple Choice • Income Statement Credit column only. • Income
Statement Debit column only. • Income Statement Debit and the
Balance Sheet Credit columns. • Income Statement Credit and the
Balance Sheet Debit columns. On April 1, 2019, a firm accepted a 6-
month, 10 percent note for $1,800 from a customer with an overdue
balance. The accrued interest recorded for this note for the year ended
June 30, 2019, is Multiple Choice • $15. • $90. • $180. • $45. On June 1,
2019, Mighty Fast Flooring issued a 10-month, 9 percent note for
$5,000. The note was recorded in the Notes Payable-Trade account.
The adjusting entry on December 31 to record the interest accrued
(owed) on the note is: Multiple Choice • a debit to Interest Expense for
$262.50 and a credit to Interest Payable for $262.50. • a debit to
Interest Expense for $262.50 and a credit to Notes Payable-Trade for
$262.50. • a debit to Interest Income for $450.00 and a credit to
Interest Receivable for $450.00. • a debit to Interest Expense for
$450.00 and a credit to Interest Payable for $450.00. After the two

adjusting entries for merchandise inventory for Marley Motorcycles
have been entered on the worksheet, the Income Summary account in
the Adjusted Trial Balance section has a debit of $65,000 and a credit of
$73,000. The amount of merchandise inventory at the beginning of the
year is: Multiple Choice • $138,000. • $8,000. • $73,000. • $65,000. The
trial balance of Premier Lighting Co. shows Merchandise Inventory of
$35,000. Based on a count taken on December 31, merchandise
inventory at the end of the year actually totaled $28,000. The adjusting
entry torecord the new merchandise inventory balance assuming the
company uses the periodic inventory system would be: Multiple Choice
• a debit to Purchases of $35,000 and a credit to Merchandise
Inventory for $35,000. • a debit to Merchandise Inventory of $28,000
and a credit to Income Summary for $28,000. • a debit to Income
$28,000. • a debit to Income Summary of 35,000 and a credit to
Merchandise Inventory for $35,000. The trial balance of Premier
Lighting Co. shows Merchandise Inventory of $35,000. The company
uses the periodic inventory system. Based on a count taken on
December 31, merchandise inventory at the end of the year actually
totaled $28,000. The adjusting entry to remove the old merchandise
inventory balance would be: Multiple Choice • a debit to Income
Income Summary for $28,000. • a debit to Income Summary of $28,000
and a credit to Merchandise Inventory for $28,000. • a debit to
Purchases of $35,000 and a credit to Merchandise Inventory for
$35,000. On August 1, 2019, a firm purchased a 1-year insurance policy
for $3,600 and paid the full premium in advance. The insurance

expense associated with this policy for the year ending December 31,
2019, is Multiple Choice • $300. • $3,600. • $1,800. • $1,500. On
October 1, 2019, Paige Turner Publishing received $5,400 in cash for
subscriptions covering one year, recording the entry as a debit to Cash
and a credit to Unearned Subscriptions. The correct adjusting entry at
December 31, 2019, is Multiple Choice • Debit Unearned Subscriptions
$5,400; credit Subscriptions Income $5,400. • Debit Unearned
Subscriptions $450; credit Subscriptions Income $450. • Debit
Unearned Subscriptions $1,350; credit Subscriptions Income $1,350. •
Debit Subscriptions Income $1,350; credit Unearned Subscriptions
$1,350. On June 1, 2019, a firm purchased a 1-year insurance policy for
$2,400 and paid the full premium in advance. The insurance expense
associated with this policy for the year ending December 31, 2019, is
Multiple Choice • $2,400. • $1,000. • $200. • $1,400. Hugh Morris
Company pays weekly wages of $15,000 every Friday for a five day
week ending on that day. If the last day of the year is on Tuesday, the
adjusting entry to record the accrued wages is: Multiple Choice • debit
Wages Expense $6,000; credit Drawing $6,000 • debit Wages Expense
$6,000; credit Wages Payable $6,000 • debit Wages Expense $15,000;
credit Cash $15,000 • debit Wages Expense $9,000; credit Wages
Payable $9,000
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due date The beginning capital balance shown on a statement of
owner’s equity is $80,000. Net income for the period is $35,000. The
owner withdrew $18,000 cash from the business and made no
additional investments during the period. The owner’s capital balance
at the end of the period is Multiple Choice • $133,000. • $97,000. •
$80,000. • $63,000. The balance of the owner’s drawing account is
reported Multiple Choice • in the Other Expenses section of the income
statement. • on the statement of owner’s equity. • in the Current
Assets section of the balance sheet. • in the Operating Expenses section
of the income statement. Which of the following statements is not
correct? Multiple Choice • The gross profit percentage is calculated by
dividing the gross profit for the year by the net sales for the year. • The
average inventory is calculated by adding the beginning inventory to
the ending inventory and dividing the sum by 2. • A current ratio of 3.5
to 1 means that a firm has $3.50 in current liabilities for every $1 of
current assets. • Working capital is the difference between total
current assets and total current liabilities. On May 1, Brown’s Antiques
paid $18,000 for 12 months of advance rent on its store and
immediately debited the asset account Prepaid Rent for the full

amount. Select the adjusting entry made on December 31, to record
the amount of rent that had expired. Multiple Choice • Prepaid Rent
12,000 Rent Expense 12,000
________________________________________ • Prepaid Rent 18,000
Rent Expense 18,000 ________________________________________
• Rent Expense 10,500 Prepaid Rent 10,500
________________________________________ • Rent Expense
12,000 Prepaid Rent 12,000
________________________________________ Use the following
account balances from the adjusted trial balance columns of RB Auto’s
worksheet to answer below question. Account Debit Balance Credit
Balance Cash 20,500 Merchandise Inventory 1,000 Accounts Payable
2,800 R. Holloway, Drawing 500 R. Holloway, Capital 13,000 Sales
15,000 Purchases 2,000 Purchase Returns and Allowances 200 Rent
Expense 3,000 Salaries Expense 4,000
________________________________________ Select the closing
entry that RB Auto would make at the end of the accounting period to
close their revenue accounts and income statement accounts with
credit balances. Multiple Choice • debit Sales and credit Income
Summary for $15,000. • debit Sales $15,000; debit Purchase Returns
and Allowances $200 and credit Income Summary for $15,200. • debit
Sales for $15,000; debit R Holloway, Capital for $13,000 and credit
Income Summary for $28,000. • debit Income Summary for $15,000
and credit Sales for $15,000. Use the following account balances from
the adjusted trial balance columns of RB Auto’s worksheet to answer
below question. Account Debit Balance Credit Balance Cash 20,500
Merchandise Inventory 1,000 Accounts Payable 2,800 R. Holloway,
Drawing 500 R. Holloway, Capital 13,000 Sales 15,000 Purchases 2,000

Purchase Returns and Allowances 200 Rent Expense 3,000 Salaries
Expense 4,000 ________________________________________ Select
the correct closing entry that RB Auto would make to close their
expense account(s) at the end of the accounting period. Multiple
Choice • debit Salary Expense $4,000; debit Rent Expense $3,000; debit
Purchases $2,000 and credit Income Summary $9,000 • debit Income
Summary $9,000 and credit Salary Expense $4,000; credit Rent Expense
$3,000; credit Purchases $2,000 • debit Income Summary $9,000 and
credit R. Holloway, Capital for $9,000 • debit R. Holloway, Capital
$9,000 and credit Salary Expense $4,000; credit Rent Expense $3,000;
credit Purchases $2,000 Use the following account balances from the
adjusted trial balance columns of Goody Chocolate’s worksheet to
answer below question. Account Debit Balance Credit Balance Cash
10,000 Merchandise Inventory 4,000 Accounts Payable 2,200 A. Goody,
Drawing 1,000 A. Goody, Capital 6,000 Sales 24,000 Sales Discounts 200
Purchases 12,000 Salaries Expense 7,500 Income Summary 1,500 4,000
________________________________________ Using the adjusted
trial balance above, select the correct closing entry that Goody
Chocolate would make to close their revenue accounts (and other
temporary income statement accounts with credit balances) at the end
of the accounting period. Multiple Choice • Income Summary 24,200
Sales 24,000 Sales Discounts 200
________________________________________ • A. Goody, Capital
28,000 Income Summary 4,000 Sales 24,000
________________________________________ • Sales 24,000 Income
Summary 24,000 ________________________________________ •
Sales 24,000 A. Goody, Capital 24,000
________________________________________ Which of the

following accounts would be closed at the end of the accounting
period? Multiple Choice • Capital • Depreciation Expense •
Accumulated Depreciation • Prepaid Rent Which of the following
accounts will appear on the post-closing trial balance? Multiple Choice
• Capital • Depreciation Expense • Sales • Payroll Tax Expense The
current ratio is calculated by Multiple Choice • dividing total assets by
total liabilities. • subracting current liabilities from current assets. •
dividing current assets by current liabilities. • adding current assets to
current liabilities.
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due date. Interest Expense is classified as a(n): Multiple Choice • Other
Income • Administrative Expense • Other Expense • Selling Expense
Which of the following accounts would be closed at the end of the
accounting period? Multiple Choice • Prepaid Rent • Accumulated
Depreciation • Depreciation Expense • Capital The Income Summary
account, for Wise Tools appears below. Based on the data contained in
the account, determine which of the statements below is correct.
Income Summary 12/31 beg inv. 4,000 12/31 ending inv. 9,000 12/31
expenses 51,000 12/31 revenues 45,000 Multiple Choice • Wise Tools
will report a $6,000 net loss for the period ending 12/31 • Wise Tools
will report a $1,000 net loss for the period ending 12/31 • Wise Tools
will report net income of $1,000 for the period ending 12/31 • Wise
Tools will report net income of $6,000 for the period ending 12/31 The
entry to reverse the adjustment for accrued interest income consists of
a debit to Multiple Choice • Interest Income and a credit to Income
Summary. • Interest Income and a credit to Interest Expense. • Interest
Income and a credit to Interest Receivable. • Interest Receivable and a
credit to Interest Income. At the end of the year Stan Still Stationery
Store had the following balances: Sales $485,000; Sales Discounts
$2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense
$54,000. The Net Sales for the year are: Multiple Choice • $468,180 •
$501,820 • $414,180 • $447,820 The beginning capital balance shown
on a statement of owner’s equity is $80,000. Net income for the period
is $37,000. The owner made no additional investments during the
period. The owner’s capital balance at the end of the period is $96,000.
The amount the owner withdrew for personal use during the period is
Multiple Choice • $80,000. • $37,000. • $21,000. • $16,000. Use the
following account balances from the adjusted trial balance columns of

Goody Chocolate’s worksheet to answer below question. Account Debit
Balance Credit Balance Cash 10,000 Merchandise Inventory 4,000
Accounts Payable 2,200 A. Goody, Drawing 1,000 A. Goody, Capital
6,000 Sales 24,000 Sales Discounts 200 Purchases 12,000 Salaries
Expense 7,500 Income Summary 1,500 4,000
Chocolate would make to close their revenue accounts (and other
temporary income statement accounts with credit balances) at the end
of the accounting period. Multiple Choice • A. Goody, Capital 28,000
Income Summary 4,000 Sales 24,000
________________________________________ • Sales 24,000 A.
Goody, Capital 24,000 ________________________________________
• Sales 24,000 Income Summary 24,000
________________________________________ • Income Summary
24,200 Sales 24,000 Sales Discounts 200
________________________________________ Which of the
following accounts will appear on the post-closing trial balance?
Multiple Choice • Payroll Taxes Expense • Miscellaneous Income •
Medicare Tax Payable • Sales Which of the following accounts will NOT
appear on the post-closing trial balance? Multiple Choice • Prepaid
Advertising • Wages Payable • Equipment • Wages Expense Which of
the following accounts is not closed at the end of the accounting
period? Multiple Choice • Sales • Purchases • Depreciation Expense •
Accounts Receivable Use the following account balances from the
adjusted trial balance columns of Goody Chocolate’s worksheet to
answer below question. Account Debit Balance Credit Balance Cash
10,000 Merchandise Inventory 4,000 Accounts Payable 2,200 A. Goody,

Drawing 1,000 A. Goody, Capital 6,000 Sales 24,000 Sales Discounts 200
Purchases 12,000 Salaries Expense 7,500 Income Summary 1,500 4,000
Chocolate would make to close the expense accounts (and cost of
goods sold accounts with debit balances) at the end of the accounting
period. Multiple Choice • Income Summary 2,500 A. Goody, Capital
2,500 ________________________________________ • Purchases
12,000 Salaries Expense 7,500 Income Summary 19,500
________________________________________ • Income Summary
19,700 Sales Discounts 200 Purchases 12,000 Salaries Expense 7,500
________________________________________ • Income Summary
19,700 Expense Accounts 19,700
________________________________________ For the current fiscal
year, Purchases were $245,000, Purchase Returns and Allowances were
$8,600, Purchase Discounts were $2,200 and Freight In was $32,000. If
the beginning merchandise inventory was $60,000 and the ending
merchandise inventory was $75,000, the Cost of Goods Sold is: Multiple
Choice • $272,800 • $281,200 • $251,200 • $266,200 The beginning
capital balance shown on a statement of owner’s equity is $64,000. Net
income for the period is $23,000 and the owner withdrew $30,000 cash
from the business and made no additional investments during the
period. The owner’s capital balance at the end of the period is Multiple
Choice • $64,000. • $57,000. • $117,000. • $71,000. For the current
fiscal year, Purchases were $187,000, Purchase Returns and Allowances
were $4,200 and Freight In was $10,500. If the beginning merchandise
inventory was $98,000 and the ending merchandise inventory was
$103,000, the Net Delivered Cost of Purchases is: Multiple Choice •

$187,000 • $172,300 • $193,300 • $201,700 Which of the following
accounts is not closed at the end of the accounting period? Multiple
Choice • Sales • Depreciation Expense • Interest Expense •
Accumulated Depreciation Which of the following statements is not
correct? Multiple Choice • The worksheet is the source of data for the
general journal entries required to close the temporary accounts. •
Closing the Revenue accounts is the first step in the closing process. • In
the closing process, the balance of the owner’s drawing account is
transferred to the debit side of the owner’s capital account. • In the
closing process, the balance of the Purchases account is transferred to
the Merchandise Inventory account. Which of the following accounts is
not closed at the end of the accounting period? Multiple Choice • Sales
• Depreciation Expense • Capital • Purchase Discounts Which of the
following would not be classified as a Current Asset: Multiple Choice •
Cash • Equipment • Accounts Receivable • Supplies Which of the
following is not a selling expense: Multiple Choice • Delivery Expense •
Advertising Expense • Rent Expense on the office • Sales Salaries
Expense Which of the following statements is correct? Multiple Choice
• The term single-step income statement is sometimes used to describe
a classified income statement. • Salaries of office employees would be
grouped with the selling expenses in the Operating Expenses section of
the income statement. • If a business is to earn a net income, the gross
profit on sales must be greater than operating expenses. • Sales less
Operating Expenses equals Gross Profit. The Income Summary account,
for Edgar’s Cigars appears below. Based on the data contained in the
account, determine which of the statements below is correct. Income
Summary 12/31 beg inv. 7,000 12/31 ending inv. 3,000 12/31 expenses
25,000 12/31 revenues 36,000 Multiple Choice • Edgar’s Cigars will

report net income of $11,000 for the period ending 12/31 • Edgar’s
Cigars will report an $11,000 net loss for the period ending 12/31 •
Edgar’s Cigars will report net income of $7,000 for the period ending
12/31 • Edgar’s Cigars will report a $7,000 net loss for the period
ending 12/31 Use the following account balances from the adjusted
trial balance columns of RB Auto’s worksheet to answer below
question. Account Debit Balance Credit Balance Cash 20,500
Merchandise Inventory 1,000 Accounts Payable 2,800 R. Holloway,
Drawing 500 R. Holloway, Capital 13,000 Sales 15,000 Purchases 2,000
Purchase Returns and Allowances 200 Rent Expense 3,000 Salaries
Expense 4,000 ________________________________________ Select
the correct closing entry that RB Auto would make to close the owner’s
withdrawal account at the end of the accounting period. Multiple
Choice • debit R. Holloway, Drawing $500 credit R. Holloway, Capital
for $500. • debit Income Summary $500 and credit R. Holloway,
Drawing for $500. • debit R. Holloway, Drawing $500 and credit Income
Summary for $500. • debit R. Holloway, Capital $500 and credit R.
Holloway, Drawing for $500. Which of the following statements is not
correct? Multiple Choice • Working capital is the difference between
total current assets and total current liabilities. • The average inventory
is calculated by adding the beginning inventory to the ending inventory
and dividing the sum by 2. • A current ratio of 3.5 to 1 means that a
firm has $3.50 in current liabilities for every $1 of current assets. • The
gross profit percentage is calculated by dividing the gross profit for the
year by the net sales for the year. In the general journal, reversing
entries are dated as of Multiple Choice • any day during the month of
the new fiscal period. • the first day of the new fiscal period. • the last
day of the old fiscal period. • any time before the end of the fiscal

period. The accountant of Randy’s Flooring has closed all of the
temporary income statement accounts. The accountant is now ready to
close the Income Summary account. The owner of the company is R.
Car. Using the Income Summary T-account below, determine the
correct closing entry the accountant needs to make in order to close
the account. Income Summary 12/31 beg inv. 2,000 12/31 ending inv.
5,000 12/31 exp. 42,000 12/31 rev. 85,000 Multiple Choice • Income
Summary 46,000 R. Car, Capital 46,000
________________________________________ • R. Car, Capital
90,000 Income Summary 90,000
________________________________________ • R. Car, Capital
46,000 Income Summary 46,000
________________________________________ • Income Summary
43,000 R. Car, Capital 43,000
________________________________________ Which of the
following should be classified as a General and Administrative Expense
on a Multi-Step Income Statement: Multiple Choice • Insurance
Expense • Delivery Expense • Sales Salaries Expense • Advertising
Expense Prepaid expenses appear in the Multiple Choice • Operating
Expenses section of the income statement. • Other Expenses section of
the income statement. • Current Liabilities section of the balance
sheet. • Current Assets section of the balance sheet. An income
statement that has one total for all revenues and one total for all
expenses is known as a Multiple Choice • classified income statement.
• single-step income statement. • categorized income statement. •
multiple-step income statement. For the current fiscal year, Purchases
were $187,000, Purchase Returns and Allowances were $4,200 and
Freight In was $10,500. If the beginning merchandise inventory was

$98,000 and the ending merchandise inventory was $103,000, the Cost
of Goods Sold is: Multiple Choice • $193,300 • $167,300 • $196,700 •
$188,300 Which of the following groups of accounts will have zero
balances after the closing process is completed? Multiple Choice •
Allowance for Doubtful Accounts and Uncollectible Accounts Expense •
Depreciation Expense and Accumulated Depreciation—Equipment •
Purchases and Purchases Returns and Allowances • Merchandise
Inventory and Sales
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