1. To record a return of merchandise purchased on credit, the accountant would
debit Purchases Returns and Allowances and credit Accounts Receivable.
debit Purchases Returns and Allowances and credit Purchases.
debit Accounts Payable and credit Purchases Returns and Allowances.
debit Purchases and credit Purchases Returns and Allowances.
2. Which of the following statements is not correct?
Cash purchases of merchandise are not recorded in the purchases journal.
A credit purchase of equipment for use in the business would be recorded in the purchases journal.
The Purchases account has a normal debit balance.
The invoice date and credit terms must be carefully recorded in the purchases journal because they determine when payment is due
3. 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
Income Statement columns.
Income Statement or Balance Sheet columns.
Balance Sheet Debit columns.
none of the above.
4. The current ratio is calculated by
dividing current assets by current liabilities.
dividing current liabilities by current assets.
dividing total assets by total current assets.
dividing current assets by total assets
5. With the accrual basis of accounting, it is appropriate to recognize revenue from a credit sale
on the date of the sale.
on the date the account is collected in full.
each time a payment on an account balance is received.
either on the date of the sale or when the amount of the sale is collected
6. Which of the following accounts is not closed?
7.. Which of the following statements is not correct?
Uncollectible Accounts Expense is a contra asset account.
The cost less the salvage value equals the depreciable base of a long-term asset.
Each adjustment for an accrued expense includes a credit to a liability account.
If a firm records prepaid expense items in 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.
8. The entry to reverse the adjusting entry for accrued payroll taxes expense includes
a debit to Payroll Taxes Expense.
a debit to Employee Income Tax Payable.
a credit to Social Security Tax Payable and a credit to Medicare Tax Payable.
a debit to Social Security Tax Payable and a debit to Medicare Tax Payable.
9. A reversing entry should not be made for an adjusting entry to record
the accrued salaries.
an accrued expense item that will involve future cash payments.
an accrued income item that will involved future cash receipts.
10. An adjusting entry is usually not required for an expense item when it is
paid for and recorded in one period but not fully used until a later period.
used in one period but not paid for or recorded until a later period.
paid for, recorded, and used in one period.
budgeted but not paid for or used during the period.
11. An income statement that lists all revenues in one section and all expenses in another section is known as a
classified income statement.
multiple-step income statement.
single-step income statement.
categorized income statement.
12. Which of the following groups of accounts will have zero balances after the closing process is completed?
Allowance for Doubtful Accounts and Uncollectible Accounts Expense
Purchases and Purchases Returns and Allowances
Merchandise Inventory and Sales
Depreciation Expense and Accumulated Depreciation-Equipment
13. Prepaid expenses appear in the
Operating Expenses section of the income statement.
Other Expenses section of the income statement.
Current Assets section of the balance sheet.
Current Liabilities section of the balance sheet.
14. The balance of the owner's drawing account is
listed in the Other Expenses section of the income statement.
listed in the Current Assets section of the balance sheet.
used in the calculation of ending capital on a statement of owner's equity.
listed in the Operating Expenses section of the income statement.
15. Which of the following statements is not correct?
The worksheet is the source of data for the general journal entries required to close the temporary accounts.
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.
All of the above statements are correct.
16. Which of the following accounts will appear on the post closing trial balance?
Payroll Tax Expense
17. On January 1, 20--, a firm purchased machinery for $17,000. Depreciation expense for 20--, given the straight-line method, a 5-year useful life, and a salvage value of $3,000, is
18. Which of the following accounts is not closed?
Purchase the answer to view it