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Exam 11: Preparing a Worksheet for a Merchandise Company

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Question 21

Multiple Choice

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Accumulated Depreciation - Buildings should be shown on the:

A) income statement.
B) post-closing trial-balance.
C) statement of owner's equity.
D) The account does not appear on a financial statement since it is a temporary account.

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Question 22

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Ending inventory:

A) increases Cost of Goods Sold.
B) decreases Cost of Goods Sold.
C) does not affect Cost of Goods Sold.
D) increases Sales.

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Question 23

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Camping for Fun purchased merchandise costing $1,000.Calculate the cost of goods sold under the following different situations: a)Beginning inventory $200 and no ending inventory. b)Beginning inventory $250 and a $300 ending inventory. c)No beginning inventory and a $150 ending inventory.

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Prepaid Subscription } & & & \\\hline\end{array}$

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Petty Cash } & & & \\\hline\end{array}$

When using a periodic inventory method,what account is increased when you buy merchandise inventory?

The adjusted trial balance on the worksheet:

When counting supplies,several boxes were missed.This would cause:

Under the accrual system,revenue is recognized when earned.

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Purchases } & & & \\\hline\end{array}$

Sales would be found on the worksheet in the:

The income statement columns on a worksheet have subtotals as follows: debit column,$12,000,and credit column,$9,000.This indicates that:

Prepare the general journal entry to record the adjustment for inventory: $\begin{array} { l r } \text { Beginning inventory } & \$ 8,000 \\\text { Ending inventory } & 7,000\end{array}$

The amount of supplies used causes an increase in Supplies and a decrease in Expense.

Recording the adjustment for supplies will:

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \begin{array} { l } \text { Depreciation } \\\text { expense }\end{array} & & & \\\hline\end{array}$

What inventory method is used when the inventory balance is updated only at the end of the accounting period?

Depreciation on equipment was recorded twice this period.This would cause:

The normal balance of Rental Income is:

When the adjustment for Unearned Rent Revenue is made: