Question

Young Corporation used a perpetual inventory system. By physical count, ending Merchandise Inventory is $82,300. The balance in the Merchandise Inventory account is $80,500. Which of the following is the correct adjusting entry?

Select one:

a. A debit to Income Summary of $1,800, and a credit to Merchandise Inventory of $1,800

b. A debit to Merchandise Inventory of $1,800, and a credit to Income Summary of $1,800

c. A debit to Cost of Goods Sold of $1,800, and a credit to Merchandise Inventory of $1,800

d. A debit to Income Summary of $1,800, and a credit to Cost of Goods Sold of $1,800

e. A debit to Merchandise Inventory of $1,800, and a credit to Cost of Goods Sold of $1,800

2.)

Which of the following account types are NOT located on the worksheet’s balance sheet?

Select one:

a. Assets

b. Drawing

c. Purchase Discounts

d. Liabilities

3.)

Sales appear under which worksheet column and has the following normal balance:

Select one:

a. Income Statement, DR

b. Income Statement, CR

c. Balance Sheet, CR

d. Balance Sheet, DR

4.)

Which of the following accounts is debited in the adjusting entry to remove beginning inventory under the periodic inventory system?

Select one:

a. Capital

b. Income Summary

c. Drawing

d. Merchandise Inventory

5.)

On the worksheet of Hill Corporation, the income statement debit column equals $78,500 and the income statement credit column equals $69,450. Hill Corporation has a:

Select one:

a. net loss of $9,050 that is added to the income statement credit column.

b. net income of $4,525 that is added to the income statement debit column.

c. net loss of $9,050 that is added to the balance sheet credit column.

d. net income of $4,525 that is added to the balance sheet debit column.

e. net income of $9,050 that is added to the adjusted trial balance credit column.

6.)

On the work sheet, Purchases Discounts appears in the

Select one:

a. Trial Balance Debit column and the Income Statement Credit column.

b. Trial Balance Credit column and the Balance Sheet Credit column.

c. Trial Balance Debit column and the Income Statement Debit column.

d. Trial Balance Credit column and the Income Statement Credit column.

e. Adjustments Debit column and the Income Statement Credit column.

7.)

At the time a firm adjusts Merchandise Inventory, the Income Summary account

Select one:

a. contains two closing entries.

b. has no balance.

c. contains an adjusting entry for unearned revenue.

d. contains the last fiscal period's adjusting entry for Merchandise Inventory.

e. contains an adjusting entry for expired prepaid insurance.

Answer 1

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Young Corporation

c. A debit to Cost of Goods Sold of $1,800, and a credit to Merchandise Inventory of $1,800

2.) Which of the following account types are NOT located on the worksheet’s balance sheet?

c. Purchase Discounts

3.) Sales appear under which worksheet column and has the following normal balance:

b. Income Statement, CR

4.) Which of the following accounts is debited in the adjusting entry to remove beginning inventory under the periodic inventory system?

b. Income Summary

Answer 5

a. net loss of $9,050 that is added to the income statement credit column.

Answer 6

d. Trial Balance Credit column and the Income Statement Credit column.

Answer 7

a. contains two closing entries.