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  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) […]

  41) The term used when the purchaser is responsible for the cost of freight is: A) F.O.B. shipping point. B) F.O.B. destination. C) Freight-In. D) Purchases. 42) The term used when the seller is responsible for the cost of freight is: A) F.O.B. shipping point. B) F.O.B. destination. C) Freight-In. D) Purchases. 43) Hardware Restoration had net purchases of $55,000. If Purchases Returns and Allowances are $10,000 and Purchases Discounts are $1,500, what are gross purchases? A) $38,500 B) $55,000 C) $66,500 D) $40,000 44) J&L Lumber reports Purchases of $66,000. If Purchases Returns and Allowances are $6,000 and […]

    38.In a firm that uses special journals, the purchase of merchandise with terms of 2/10, n/30 is recorded in the    A. cash payments journal.   B. cash receipts journal.   C. purchases journal.   D. general journal.         39.In a firm that uses special journals, the return of damaged merchandise to a supplier and receipt of a credit memorandum is recorded in the    A. cash payments journal.   B. cash receipts journal.   C. purchases journal.   D. general journal.         40.In a firm that uses special journals, the purchase of merchandise for $2,800, payable in 30 days, plus a […]

  Fill in the Blank Questions  12.A(n) ____________________ business sells goods that it purchases in finished form for resale.          13.The entry to record a sale of merchandise on credit that is subject to sales tax includes a(n) ____________________ to Sales Tax Payable.          14.A business that sells goods and services directly to individual consumers is called a(n) ____________________ business.          15.The stock of goods kept on hand to sell to consumers is called ________________________.          16.A(n) ____________________ journal is a journal that is used to record only one type of transaction.    […]

    37.Which of the following accounts will not normally have a zero balance after the closing entries have been posted?    A. Income Summary   B. Fees Income   C. The owner's capital account   D. Rent Expense         38.One purpose of closing entries is to    A. transfer the results of operations to owner's equity.   B. reduce the owner's capital account balance to zero so that the account is ready for the next period.   C. adjust the ledger account balances to provide complete and accurate figures for use on financial statements.   D. close all accounts so that the ledger is ready for […]