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ACC 291T Week 5 Apply: Connect® Exercise

ACC 291T Week 5 Apply: Connect® Exercise

Review the Knowledge Check in preparation for this assignment.

Complete the Week 5 Exercise in Connect®.

Note: You have only one attempt available to complete this assignment.

Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date

The beginning capital balance shown on a statement of owner’s equity is $80,000. Net income for the period is $35,000. The owner withdrew $18,000 cash from the business and made no additional investments during the period. The owner’s capital balance at the end of the period is

Multiple Choice



$133,000.



$97,000.



$80,000.



$63,000.

The balance of the owner’s drawing account is reported

Multiple Choice



in the Other Expenses section of the income statement.



on the statement of owner’s equity.



in the Current Assets section of the balance sheet.



in the Operating Expenses section of the income statement.

Which of the following statements is not correct?

Multiple Choice



The gross profit percentage is calculated by dividing the gross profit for the year by the net sales for the year.



The average inventory is calculated by adding the beginning inventory to the ending inventory and dividing the sum by 2.



A current ratio of 3.5 to 1 means that a firm has $3.50 in current liabilities for every $1 of current assets.



Working capital is the difference between total current assets and total current liabilities.

On May 1, Brown’s Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited the asset account Prepaid Rent for the full amount. Select the adjusting entry made on December 31, to record the amount of rent that had expired.

Multiple Choice



Prepaid Rent 12,000

Rent Expense 12,000

________________________________________



Prepaid Rent 18,000

Rent Expense 18,000

________________________________________



Rent Expense 10,500

Prepaid Rent 10,500

________________________________________



Rent Expense 12,000

Prepaid Rent 12,000

________________________________________

Use the following account balances from the adjusted trial balance columns of RB Auto’s worksheet to answer below question.

Account Debit Balance Credit Balance

Cash 20,500

Merchandise Inventory 1,000

Accounts Payable 2,800

R. Holloway, Drawing 500

R. Holloway, Capital 13,000

Sales 15,000

Purchases 2,000

Purchase Returns and Allowances 200

Rent Expense 3,000

Salaries Expense 4,000

________________________________________

Select the closing entry that RB Auto would make at the end of the accounting period to close their revenue accounts and income statement accounts with credit balances.

Multiple Choice



debit Sales and credit Income Summary for $15,000.



debit Sales $15,000; debit Purchase Returns and Allowances $200 and credit Income Summary for $15,200.



debit Sales for $15,000; debit R Holloway, Capital for $13,000 and credit Income Summary for $28,000.



debit Income Summary for $15,000 and credit Sales for $15,000.

Use the following account balances from the adjusted trial balance columns of RB Auto’s worksheet to answer below question.

Account Debit Balance Credit Balance

Cash 20,500

Merchandise Inventory 1,000

Accounts Payable 2,800

R. Holloway, Drawing 500

R. Holloway, Capital 13,000

Sales 15,000

Purchases 2,000

Purchase Returns and Allowances 200

Rent Expense 3,000

Salaries Expense 4,000

________________________________________

Select the correct closing entry that RB Auto would make to close their expense account(s) at the end of the accounting period.

Multiple Choice



debit Salary Expense $4,000; debit Rent Expense $3,000; debit Purchases $2,000 and credit Income Summary $9,000



debit Income Summary $9,000 and credit Salary Expense $4,000; credit Rent Expense $3,000; credit Purchases $2,000



debit Income Summary $9,000 and credit R. Holloway, Capital for $9,000



debit R. Holloway, Capital $9,000 and credit Salary Expense $4,000; credit Rent Expense $3,000; credit Purchases $2,000

Use the following account balances from the adjusted trial balance columns of Goody Chocolate’s worksheet to answer below question.

Account Debit Balance Credit Balance

Cash 10,000

Merchandise Inventory 4,000

Accounts Payable 2,200

A. Goody, Drawing 1,000

A. Goody, Capital 6,000

Sales 24,000

Sales Discounts 200

Purchases 12,000

Salaries Expense 7,500

Income Summary 1,500 4,000

________________________________________

Using the adjusted trial balance above, select the correct closing entry that Goody Chocolate would make to close their revenue accounts (and other temporary income statement accounts with credit balances) at the end of the accounting period.

Multiple Choice



Income Summary 24,200

Sales 24,000

Sales Discounts 200

________________________________________



A. Goody, Capital 28,000

Income Summary 4,000

Sales 24,000

________________________________________



Sales 24,000

Income Summary 24,000

________________________________________



Sales 24,000

A. Goody, Capital 24,000

________________________________________

Which of the following accounts would be closed at the end of the accounting period?

Multiple Choice



Capital



Depreciation Expense



Accumulated Depreciation



Prepaid Rent

Which of the following accounts will appear on the post-closing trial balance?

Multiple Choice



Capital



Depreciation Expense



Sales



Payroll Tax Expense

The current ratio is calculated by

Multiple Choice



dividing total assets by total liabilities.



subracting current liabilities from current assets.



dividing current assets by current liabilities.



adding current assets to current liabilities.

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