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Practice Test #6

Description

Unit test on merchandising business.
Kathleen Keller
Quiz by Kathleen Keller, updated more than 1 year ago
Kathleen Keller
Created by Kathleen Keller over 7 years ago
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Resource summary

Question 1

Question
Dharma is closing the books at the end of the accounting period. How should she close the debit amounts in the Income Statement?
Answer
  • Debit the debit balance Income Statement accounts; credit to Income Summary
  • Debit to Retained Earnings; credit the debit balance Income Statement accounts
  • Credit the debit balance Income Statement accounts; debit to Income Summary
  • Credit the debit balance Income Statement accounts; credit Retained Earnings

Question 2

Question
At the end of the year, Utz Milk Transport calculated its Federal Income Tax amount for the year to be $7,000. Utz Milk Transport already made Federal Income Tax payments in the amount of $4,000. How is the adjusting entry for Federal Income Tax Expense recorded on a multi-column trial balance worksheet?
Answer
  • In the adjustments columns, Debit Federal Income Tax Expense, $4,000; Credit Federal Income Tax Payable, $4,000
  • In the adjustments columns, Debit Federal Income Tax Expense, $7,000; Credit Federal Income Tax Payable, $7,000
  • In the adjustments columns, Debit Federal Income Tax Expense, $3,000; Credit Federal Income Tax Payable, $3,000
  • In the adjustments columns, Debit Federal Income Tax Expense, $11,000; Credit Federal Income Tax Payable, $11,000

Question 3

Question
$1,500 of the current year's sales will eventually be uncollectible. The Allowance for Uncollectible Accounts balance is $200. What is the journal entry for recording the adjustment for uncollectible accounts?
Answer
  • Debit Allowance for Uncollectible Accounts, $1,500; credit Uncollectible Accounts Expense, $1,500
  • Debit Uncollectible Accounts Expense, $1,500; credit Allowance for Uncollectible Accounts, $1,500
  • Debit Allowance for Uncollectible Accounts, $1,300; credit Uncollectible Accounts Expense, $1,300
  • Debit Uncollectible Accounts Expense, $1,300; credit Allowance for Uncollectible Accounts, $1,300

Question 4

Question
Accessories Plus is closing its books at the end of the year. It is ready to close the dividends account. What is the correct journal entry?
Answer
  • Debit to Income Summary; credit to Dividends
  • Debit to Retained Earnings; credit to Dividends
  • Debit to Dividends; credit to Retained Earnings
  • Debit to Dividends; credit to Income Summary

Question 5

Question
Supplies - Office has a balance of $3,500. At the end of the month, a physical count of the Supplies - Office items shows $1,500 is on hand. How is the adjusting entry to Supplies - office recorded on a multi-column trial balance worksheet?
Answer
  • In the adjustments columns, debit Supplies-Office, $2,000; credit Supplies Expense - Office, $2,000
  • In the adjustments columns, debit Supplies Expense - Office, $2,000; credit Supplies-Office, $2,000
  • In the adjustments columns, debit Supplies-Office, $1,500; credit Supplies Expense - Office, $1,500
  • In the adjustments columns, debit Supplies Expense - Office, $1,500; credit Supplies-Office, $1,500

Question 6

Question
Office Equipment has a balance of $9,000. The equipment has a useful life of 3 years and a salvage value of $3,000. At the end of the year, how is the adjusting entry for depreciation recorded on a multi-column trial balance worksheet?
Answer
  • In the adjustments columns, debit Office Equipment, $2,000; credit Depreciation Expense - Office Equipment, $2,000
  • In the adjustments columns, debit Depreciation Expense - Office Equipment, $2,000; credit Office Equipment, $2,000
  • In the adjustments columns, debit Accumulated Depreciation - Office Equipment, $6,000; credit Depreciation Expense - Office Equipment, $6,000
  • In the adjustments columns, Debit Depreciation Expense - Office Equipment, $2,000; Credit Accumulated Depreciation - Office Equipment, $2,000.

Question 7

Question
The merchandise inventory account has a balance of $1,000. At the end of the month, a physical count of the inventory items shows $1,700 is on hand. How is the adjusting entry to inventory recorded on a multi-column trial balance worksheet?
Answer
  • Debit Merchandise Inventory, $700; credit Income Summary, $700
  • Debit Income Summary, $700; credit Merchandise Inventory, $700
  • Debit Merchandise Inventory, $1,700; credit Income Summary, $1,700
  • Debit Income Summary, $1,700; credit Merchandise Inventory, $1,700

Question 8

Question
Tiny Church Warehouse made the journal entry shown in Figure 3.03 O in their Cash Payments Journal. What is the correct posting of this entry to the general ledger?
Image:
4a2b7a56-aba6-4204-abc1-4032a2f79cd8 (image/png)
Answer
  • Debit Cash, $210; Credit Accounts Payable, $210
  • Debit Purchases, $210; Credit Accounts Payable $210
  • Debit Purchases, $210; credit Cash, $210
  • Debit Cash, $210; credit Purchases, $210

Question 9

Question
At the end of the year, Super Shipping calculated its Federal Income Tax amount for the year to be $10,000. Super Shipping already made Federal Income Tax payments in the amount of $4,000. How is the adjusting entry for Federal Income Tax Expense recorded on a multi-column trial balance worksheet?
Answer
  • In the adjustments columns, debit Federal Income Tax Expense, $4,000; credit Federal Income Tax Payable, $4,000
  • In the adjustments columns, debit Federal Income Tax Expense, $6,000; credit Federal Income Tax Payable, $6,000
  • In the adjustments columns, debit Federal Income Tax Expense, $10,000; credit Federal Income Tax Payable, $10,000
  • In the adjustments columns, debit Federal Income Tax Expense, $14,000; credit Federal Income Tax Payable, $14,000

Question 10

Question
Sarah discovered that a sale on account to Jones Company on June 5 for $560 was incorrectly charged to Jackson Company. What is the journal entry to correct this error?
Answer
  • Debit Jones Company $560 and credit Jackson Company $560
  • Debit Accounts Receivable/Jones Company $560 and credit Accounts Receivable/Jackson Company $560
  • Debit Jackson Company $560 and credit Jones Company $560
  • Debit Accounts Payable/Jackson Company $560 and credit Accounts Payable/Jones Company $560

Question 11

Question
The merchandise inventory account has a balance of $1,500. At the end of the month, a physical count of the inventory items shows $2,200 is on hand. How is the adjusting entry to inventory recorded on a multi-column trial balance worksheet?
Answer
  • Debit Merchandise Inventory, $700; credit Income Summary, $700
  • Debit Income Summary, $700; credit Merchandise Inventory, $700
  • Debit Merchandise Inventory, $3,700; credit Income Summary, $3,700
  • Debit Income Summary, $3,700; credit Merchandise Inventory, $3,700

Question 12

Question
At the end of the accounting period the prepaid insurance account needs to be adjusted by $680 to reflect insurance that has been used during the period. How is the adjustment recorded on the multi-column trial balance worksheet?
Answer
  • In the Adjustments columns, debit insurance expense, $680; credit prepaid insurance, $680
  • In the Adjustments columns, debit prepaid insurance, $680; credit insurance expense, $680
  • In the Income Statement columns, debit prepaid insurance, $680; credit insurance expense, $680
  • In the Trial Balance columns, debit prepaid insurance, $680; credit insurance expense, $680

Question 13

Question
The merchandise inventory account has a balance of $2,700. At the end of the month, a physical count of the inventory items shows $2,400 on hand. How is the adjusting entry to inventory recorded on a multi-column trial balance worksheet?
Answer
  • Debit Merchandise Inventory, $300; Credit Income Summary, $300
  • Debit Income Summary, $300; Credit Merchandise Inventory, $300
  • Debit Merchandise Inventory, $2,700; Credit Income Summary, $2,700
  • Debit Income Summary, $2,700; Credit Merchandise Inventory, $2,700

Question 14

Question
Simon's CDs is closing their books at the end of the year. They have a net loss of $30,000. What is the correct entry to close the Income Summary account?
Answer
  • Debit Income Summary, $30,000; credit Retained Earnings, $30,000
  • Debit Retained Earnings, $30,000; credit Dividends, $30,000
  • Debit Retained Earnings, $30,000; credit Income Summary, $30,000
  • Debit to Dividends, $30,000; credit Income Summary, $30,000

Question 15

Question
At the end of the accounting period, the prepaid insurance account needs to be adjusted by $721 to reflect insurance that has been used during the period. How is the adjustment recorded on the multi-column trial balance worksheet?
Answer
  • In the Adjustments columns, debit insurance expense, $721; credit prepaid insurance, $721
  • In the Adjustments columns, debit prepaid insurance, $721; credit insurance expense, $721
  • In the Income Statement columns, debit prepaid insurance, $721; credit insurance expense, $721
  • In the Trial Balance columns, debit prepaid insurance, $721; credit insurance expense, $721

Question 16

Question
Using the Year ended worksheet for Frozen Tundra Outdoor Sales in Figure 3.03 R, what are the Net Sales?
Image:
289aad5c-9e24-4756-832b-eeeda06e9d01 (image/png)
Answer
  • Net sales are $20,650
  • Net sales are $54,900
  • Net sales are $56,450
  • Net sales are $56,000

Question 17

Question
Supplies-Store has a balance of $2,200. At the end of the month, a physical count of the Supplies-Store items shows $1,400 is on hand. How is the adjusting entry to Supplies-Store recorded on a multi-column trial balance worksheet?
Answer
  • In the adjustments columns, debit Supplies-Store, $800; credit Supplies Expense- Store, $800
  • In the adjustments columns, debit Supplies Expense-Store, $800; credit Supplies-Store, $800
  • In the adjustments columns, debit Supplies-Store, $1,400; credit Supplies Expense-Store, $1,400
  • In the adjustments columns, debit Supplies Expense-Store, $1,400; credit Supplies-Store, $1,400

Question 18

Question
Using the Year Ended Worksheet for Adams Accounting in Figure 3.03 S, compute the merchandise inventory balance on the Post-Closing Trial Balance.
Image:
c6e611ce-11d1-450c-9132-247f90ef1de3 (image/png)
Answer
  • The merchandise inventory balance is $200.
  • The merchandise inventory balance is $1200.
  • The merchandise inventory balance is $1400.
  • The merchandise inventory balance is $1600.

Question 19

Question
Store Equipment has a balance of $30,000. The equipment has a useful life of 8 years and a salvage value of $6,000. At the end of the year, how is the adjusting entry for depreciation recorded on a multi-column trial balance worksheet?
Answer
  • In the adjustments columns, debit Store Equipment, $3,000; credit Depreciation Expense - Store Equipment, $3,000
  • In the adjustments columns, debit Depreciation Expense - Store Equipment, $3,000; credit Store Equipment, $3,000
  • In the adjustments columns, debit Accumulated Depreciation - Store Equipment, $3,000; credit Depreciation Expense - Store Equipment, $3,000
  • In the adjustments columns, debit Depreciation Expense - Store Equipment, $3,000; credit Accumulated Depreciation - Store Equipment, $3,000

Question 20

Question
Using the year ended worksheet for Frozen Tundra Outdoor Sales in Figure 3.03 R, what is the cost of merchandise sold?
Image:
c47b9937-4ef3-4015-a0bd-f8651bfcca6c (image/png)
Answer
  • The cost of merchandise sold is $18,050
  • The cost of merchandise sold is $19,550
  • The cost of merchandise sold is $44,400
  • The cost of merchandise sold is $45,900

Question 21

Question
Susan discovered that a sale on account to Michelle Company on February 12 for $800 was incorrectly charged to the account of Michael Company. What is the journal entry to correct this error?
Answer
  • Debit Michael Company $800 and credit Michelle Company $800
  • Debit Accounts Receivable/Michael Company $800 and credit Accounts Receivable/Michelle Company $800
  • Debit Michelle Company $800 and credit Michael Company $800
  • Debit Accounts Payable/Michelle Company $800 and credit Accounts Payable/Michael Company $800

Question 22

Question
Using the year ended worksheet for Alaina's Accounting in Figure 3.03 T, what is the Acc. Depr. - Store Equip. balance on the Post-Closing Trial Balance?
Image:
eafdaa18-a1c5-4180-90a8-b0ee15f305d0 (image/png)
Answer
  • The Acc. Depr. - Store Equip. balance is $50
  • The Acc. Depr. - Store Equip balance is $600
  • The Acc. Depr. - Store Equip balance is $1,000
  • The Acc. Depr. - Store Equip balance is $1,500

Question 23

Question
Find the cost of merchandise sold, given the following information: Purchases, $8,000; Beginning Inventory, $45,000; Ending Inventory, $31,000.
Answer
  • $22,000
  • $68,000
  • $84,000
  • $ 6,000

Question 24

Question
$1,800 of the current year's sales will eventually be uncollectible. The Allowance for Uncollectible Accounts balance is $150. What is the journal entry for recording the uncollectible accounts adjustment?
Answer
  • Debit Allowance for Uncollectible Accounts, $1,800; credit Uncollectible Accounts Expense - Office, $1,800
  • Debit Uncollectible Accounts Expense, $1,800; credit Allowance for Uncollectible Accounts, $1,800
  • Debit Uncollectible Accounts Expense, $1,650; credit Allowance for Uncollectible Accounts, $1,650
  • Debit Allowance for Uncollectible Accounts, $1,650; credit Uncollectible Accounts Expense, $1,650
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