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  12.2   Learning Objective 2 1) How is Income Summary closed if the company had a net loss? A) Credit Income Summary; debit Capital B) Debit Income Summary; credit Capital C) Debit Capital; credit Revenue D) Debit Withdrawals; credit Capital 2) How is Income Summary closed if the company had a net income? A) Debit Capital; credit Income Summary B) Debit Income Summary; credit Capital C) Debit Capital; credit Withdrawals D) Debit Withdrawals; credit Capital 3) Adjusting entries from the worksheet: A) are journalized and posted to the ledger. B) are posted directly to the ledger. C) are closed to […]

  11.2   Learning Objective 11-2 1) When completing a worksheet: A) the ending inventory amount appears in the income statement debit column. B) the beginning inventory amount appears in the adjustment credit column. C) the ending inventory amount appears in the unadjusted trial balance debit column of the worksheet. D) the beginning inventory amount appears in the balance sheet debit column of the worksheet. 2) The balance sheet columns on the worksheet prepared for Cleveland Foods had subtotals as follows: debit column, $13,000, and credit column, $10,400. This information indicates that: A) the company incurred a net income of $2,600. […]

  71) The Freight-in account is an operating expense account. 72) Mortgage Payable is a contra-liability account. 73) Mortgage Payable is found on the income statement. 74) Sales Discount is used when calculating Net Purchases. 75) Indicate the normal balance of each of the following accounts: a) Purchases Returns and Allowances b) Merchandise Inventory c) Freight-In d) Sales Returns and allowances e) Unearned Revenue 76) Under the periodic inventory method, indicate the financial statement(s) on which you would find the following items: a) Cost of goods sold b) Freight-In c) Ending Inventory d) Beginning Inventory e) Sales Discount    

  11) Which inventory appears in the balance sheet column of the worksheet? A) Ending inventory B) Beginning inventory C) Combination of beginning and ending inventories D) Purchases 12) The adjusted trial balance on the worksheet: A) contains balances from the permanent accounts. B) contains balances from the temporary accounts. C) contains balances for all accounts with balances. D) contains balances for accounts not requiring adjustments. 13) The trial balance columns on the worksheet are populated using the: A) general journal. B) general ledger. C) subsidiary ledger. D) None of the above 14) Sales would be found on the worksheet […]

  11) The second entry to adjust Merchandise Inventory includes: A) a debit to Merchandise Inventory. B) a credit to Merchandise Inventory. C) a debit to Income Summary. D) None of these is correct. 12) Unearned Rent is what type of account? A) Asset B) Revenue C) Liability D) Expense 13) As Unearned Rent Revenue is earned, it becomes: A) an asset. B) a revenue. C) a liability. D) an expense. 14) Max received $6,000 in advance for renting part of his building. What is the entry to record the receipt of payment? A) Debit Cash; credit Rent Expense B) […]