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Accounting - Preparing An 8-Column Work Sheet For A Merchandising Business - Part 2
Test Description: Review for Test
Instructions: Answer all questions to get your test result.
1) Preparing a work sheet at the end of each fiscal period is an application of the accounting concept
A
Matching Expenses with Revenue
B
Accounting Period Cycle
C
Adequate Disclosure
D
Historical Cost
2) The book value of accounts receivable
A
reflects the amount the business expects to collect in the future.
B
is calculated as Accounts Receivable less Uncollectible Accounts Expense.
C
can be obtained from a single general ledger account.
D
is equal to the balance in the Accounts Receivable controlling account.
3) The entry to journalize the adjustment for merchandise inventory when beginning Merchandise Inventory is $130,000.00 and ending Merchandise Inventory is $140,000.00 is
A
debit Income Summary, $10,000.00; credit Merchandise Inventory, $10,000.00.
B
debit Merchandise Inventory, $10,000.00; credit Income Summary, $10,000.00.
C
debit Income Summary, $140,000.00; credit Merchandise Inventory, $140,000.00.
D
debit Merchandise Inventory, $140,000.00; credit Income Summary, $140,000.00.
4) Recording expenses in the fiscal period in which the expenses contribute to earning revenue is an application of the accounting concept
A
Matching Expenses with Revenue
B
Historical Cost
C
Adequate Disclosure
D
Accounting Period Cycle
5) Depreciation expense is calculated using all of the following amounts except
A
original cost
B
estimated useful life
C
fair market value
D
estimated salvage value
6) The total amount of depreciation expense that has been recorded since the purchase of a plant asset is called
A
salvage value
B
accumulated depreciation
C
book value
D
net realizable value
7) The adjustment for federal income tax includes
A
a liability account only
B
an expense and a liability account
C
an expense account and a temporary equity account
D
an expense account only
8) When a work sheet is completed, a net loss will appear in the
A
Income Statement Credit and Balance Sheet Debit columns.
B
Balance Sheet Debit and Balance Sheet Credit columns.
C
Income Statement Debit and Balance Sheet Credit columns.
D
Income Statement Debit and Income Statement Credit columns.
9) Generally accepted accounting principles require that corporations charge 1% of credit sales as an adjustment for uncollectible accounts.
A
True
B
False
10) Annual straight-line depreciation expense of a plant asset is calculated as the original cost of the plant asset divided by the years of estimated useful life.
A
True
B
False
*select an answer for all questions
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