Basic accounting chapter 12

To adjust assets and liability accounts to their beginning balance

A group of closing entries does NOT include

A. The post-closing trial balance is prepared B. The temporary accounts are zeroed out C. The capital account includes the current net profit or loss D. All of these answers are correct ANSWER: D

After the closing entries have been posted:

Credit income summary; debit capital

How is income summary closed if the company had a net loss?

$15,400

If beginning inventory is $6000, ending inventory is $3000, net purchases are $12000 and frieght-in is $400. What is the cost of goods sold?

$4,100

If net sales is $10800, cost of goods sold is $5100. Gross profit is $5700 and operating expenses are $1600, What is the net income from operating

A.plant and equipment B. Current liabilities C. Long-term liabilities D. Both B and C are correct

In what category in a classified balance sheet is mortgage payable found?

Debit income summary $140; credit capital $140

Income summary, before closing to capital contains a debit balance of $100 and a credit balance of $240. What is the entry to close income summary to capital

How easily an asset can be converted to cash

Liquidity is:

Purchases

Merchandise purchased for resale under the periodic inventory method is added to:

Gross sales

Net sales+ sales discounts +sales returns and allowances equals:

A.operating expense B.administrative expense C.selling expenses D.none of the above are correct ANSWER: D

Other expense is used to record:

Merchandise inventory

The calculation of net purchases does NOT include:

Net income to be overstated

The ending merchandise inventory was overstated. This would cause

Capital account would be overstated

The entry to close the expense account(s) was entered in reverse- income summary was credited and the expense account was debited

The capital account to be overstated

The entry to close the withdrawals account to capital was omitted. This would cause:

Balance sheet columns on the worksheet

The information to prepare the statement of owners equity comes from:

Only permanent accounts

The post-closing trial balance contains:

the general ledger

The post-closing trial balance is prepared from:

The business earned a net income for the period

Which of fhe following transactions could cause the income summary to be debited and capital to be credited?

A.salaries expense B.payroll expense C.purchases D. A and B are both correct. Answer: D

Which of the following is an operating expense?