1.) Which of the following accounts should be closed to Income Summary at the end of the fiscal year?
A. Merchandise Inventory
B. Accumulated Depreciation
D. Cost of Merchadise Sold
2.) All of the following are the primary financial statements of a sole proprietorship except the:
A. balance sheet
B. Income statement
C. Cash budget
D. Statement of owners’ equity
3.) Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?
A. Utilites Expense
B. Fees Earned
C. Prepaid Insurance
D. Insurance Expense
4.) Which of the following groups of accounts have a normal debit balance?
A. Revenues, liabilities and capital
B. capital and assets
C. liabilities and capital
D. assets and expenses
5.) The adjusting entry to record the depreciation of a building for the fiscal period is:
A. debit depreciation expense, credit building
B. debit depreciation expense, credit accumulated depreciation
C. debit accumulated depreciation, credit depreciation expense
D. debit building, credit depreciation expense
6.) Which one of the following is not considered a special journal?
A. purchase journal
B. cash receipts journal
C. general journal
D. cash payments journal
7.) Which of the following types of accounts have a normal credit balance?
A. assets and liabilities
B. liabilities and expenses
C. revenues and capital
D. capital and drawing
8.) The two methods of accounting for uncollectible receivables are the allowance method and the:
A. equity method
B. direct write off method
C. interest method
D. cost method
9.) Cumberland Company sells $2,000 worth of merchandise to Hancock Company for cash.
Cumberland paid $1,250 for the merchandise.
Under a perpetual inventory system, which of the following journal entries would be recorded by Cumberland Company?
A. debit Cash $2,000; credit Merchandise Inventory $1,250
B. debit Cash $2,000; credit Sales $2,000; and debit Cost of Merchandise Sold $1,250; credit Merchandise Inventory $1,250
C. debit Cash $1,250; credit Sales $1,250
D. debit Accounts Receivable $2,000; credit Sales $2,000; and debit Cost of Merchandise Sold $1,250; credit Merchandise Inventory $1,250
10.) Which of the following entries records the collection of cash from cash customers?
A. Debit Fees Earned; credit Cash
B. Debit Fees Earned; credit Accounts Receivable
C. Debit Cash; credit Fees Earned
D. Debit Accounts Receivable; credit Fees Earned