Question 1

After the ____________________ entries are posted, the Sales account will have a zero balance.

Accepted Answer

The answer of After the ____________________ entries are posted, the...

Question 2

Prepaid expenses appear in the

Accepted Answer

Prepaid expenses are considered as current assets since they represent a cost that has been paid in advance but will benefit the company in the future. Therefore, they should be reported in the Current Assets section of the balance sheet.

Question 3

Gross profit on sales is calculated by subtracting

Accepted Answer

Gross profit on sales is calculated by subtracting the cost of goods sold from net sales. This gives the gross profit, which represents the profit made from selling goods or services before deducting other expenses such as operating expenses and taxes.

Question 4

Which of the following statements is not correct?

Accepted Answer

A current ratio of 3.5 to 1 means that a firm has $3.50 in current assets for every $1 of current liabilities, not the other way around.

Question 5

If ____________________ entries are recorded, there is no need to examine each transaction in the new fiscal period to see whether a portion applies to a past period and then divide the amount of the transaction between the two periods.

Accepted Answer

The answer of If ____________________ entries are recorded, there is...

Question 6

The ____________________ of a building is the portion of the original cost that has not yet been depreciated.

Accepted Answer

The answer of The ____________________ of a building is the...

Question 7

Each balance appearing in the ____________________ section of the worksheet is closed into the Income Summary account.

Accepted Answer

The answer of Each balance appearing in the ____________________ section...

Question 8

The beginning capital balance shown on a statement of owner's equity is $43,000. Net income for the period is $18,000. The owner withdrew $22,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

Accepted Answer

The answer of The beginning capital balance shown on a...

Question 9

An adjusting entry was made for accrued salaries of $600 at the end of 2013. The adjusting entry was then reversed. To record the first payroll of 2014, which totaled $1,500, Salaries Expense should be debited for ____________________.

Accepted Answer

The answer of An adjusting entry was made for accrued...

Question 10

The beginning capital balance shown on a statement of owner's equity is $86,000. Net income for the period is $36,000. The owner withdrew $44,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

Accepted Answer

The answer of The beginning capital balance shown on a...

Question 11

An income statement that has one total for all revenues and one total for all expenses is known as a

Accepted Answer

A single-step income statement is a type of income statement that shows only one total for all revenues and one total for all expenses, without breaking them down into categories or steps.

Question 12

The beginning capital balance shown on a statement of owner's equity is $100,000. Net income for the period is $50,000. The owner withdrew $25,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

Accepted Answer

The answer of The beginning capital balance shown on a...

Question 13

The inventory ____________________ represents the time period it takes from the purchase of the inventory until it is sold.

Accepted Answer

The answer of The inventory ____________________ represents the time period...

Question 14

The balance sheet is arranged in a ____________________ format if assets and liabilities are divided into groups of similar accounts and a subtotal is given for each group.

Accepted Answer

The answer of The balance sheet is arranged in a...

Question 15

A gross profit percentage of 45 percent means that for every $1 of net sales, gross profit amounts to ____________________.

Accepted Answer

The answer of A gross profit percentage of 45 percent...

Question 16

Which of the following statements is correct?

Accepted Answer

Option A is incorrect because a single-step income statement is a simplified version of an income statement that includes only two sections: revenues and expenses. Option C is incorrect because salaries of office employees would be grouped with administrative expenses, not selling expenses. Option D is incorrect because option A and C are incorrect. Option B is correct because it is a fundamental principle of accounting that in order to earn a net income, a business must have gross profits that are greater than their operating expenses.

Question 17

The balance of the owner's drawing account is

Accepted Answer

The owner's drawing account is used in the calculation of ending capital on a statement of owner's equity. This account reflects the amount of money that the owner has withdrawn from the business for personal use and is not considered a business expense. Therefore, it should not be listed in the income statement but is a part of the balance sheet and statement of owner's equity.

Question 18

Which of the following is not a current asset?

Accepted Answer

Equipment is a fixed asset, whereas the other options are all current assets. Current assets are those that are expected to be converted into cash within one year or one operating cycle.

Question 19

The entry to reverse an adjustment for accrued interest expense includes a debit to ____________________.

Accepted Answer

The answer of The entry to reverse an adjustment for...

Question 20

Each reversing entry is the exact opposite of the related ____________________ entry.

Accepted Answer

The answer of Each reversing entry is the exact opposite...

Quiz 13: Financial Statements and Closing Procedures

After the ____________________ entries are posted, the Sales account will have a zero balance.

Prepaid expenses appear in the

Gross profit on sales is calculated by subtracting

Which of the following statements is not correct?

If ____________________ entries are recorded, there is no need to examine each transaction in the new fiscal period to see whether a portion applies to a past period and then divide the amount of the transaction between the two periods.

The ____________________ of a building is the portion of the original cost that has not yet been depreciated.

Each balance appearing in the ____________________ section of the worksheet is closed into the Income Summary account.

The beginning capital balance shown on a statement of owner's equity is $43,000. Net income for the period is $18,000. The owner withdrew $22,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

An adjusting entry was made for accrued salaries of $600 at the end of 2013. The adjusting entry was then reversed. To record the first payroll of 2014, which totaled $1,500, Salaries Expense should be debited for ____________________.

The beginning capital balance shown on a statement of owner's equity is $86,000. Net income for the period is $36,000. The owner withdrew $44,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

An income statement that has one total for all revenues and one total for all expenses is known as a

The beginning capital balance shown on a statement of owner's equity is $100,000. Net income for the period is $50,000. The owner withdrew $25,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

The inventory ____________________ represents the time period it takes from the purchase of the inventory until it is sold.

The balance sheet is arranged in a ____________________ format if assets and liabilities are divided into groups of similar accounts and a subtotal is given for each group.

A gross profit percentage of 45 percent means that for every $1 of net sales, gross profit amounts to ____________________.

Which of the following statements is correct?

The balance of the owner's drawing account is

Which of the following is not a current asset?

The entry to reverse an adjustment for accrued interest expense includes a debit to ____________________.

Each reversing entry is the exact opposite of the related ____________________ entry.