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ACC 291T Week 5 Practice: Connect® Knowledge Check

ACC 291T Week 5 Practice: Connect® Knowledge Check

Complete the Week 5 Knowledge Check in Connect®.

Note: You have unlimited attempts available to complete this practice assignment. The highest scored attempt will be recorded.

These assignments have earlier due dates, so plan accordingly.

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

Interest Expense is classified as a(n):

Multiple Choice



Other Income



Administrative Expense



Other Expense



Selling Expense

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

Multiple Choice



Prepaid Rent



Accumulated Depreciation



Depreciation Expense



Capital

The Income Summary account, for Wise Tools appears below. Based on the data contained in the account, determine which of the statements below is correct.

Income Summary

12/31 beg inv. 4,000 12/31 ending inv. 9,000

12/31 expenses 51,000 12/31 revenues 45,000

Multiple Choice



Wise Tools will report a $6,000 net loss for the period ending 12/31



Wise Tools will report a $1,000 net loss for the period ending 12/31



Wise Tools will report net income of $1,000 for the period ending 12/31



Wise Tools will report net income of $6,000 for the period ending 12/31

The entry to reverse the adjustment for accrued interest income consists of a debit to

Multiple Choice



Interest Income and a credit to Income Summary.



Interest Income and a credit to Interest Expense.



Interest Income and a credit to Interest Receivable.



Interest Receivable and a credit to Interest Income.

At the end of the year Stan Still Stationery Store had the following balances: Sales $485,000; Sales Discounts $2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense $54,000. The Net Sales for the year are:

Multiple Choice



$468,180



$501,820



$414,180



$447,820

The beginning capital balance shown on a statement of owner’s equity is $80,000. Net income for the period is $37,000. The owner made no additional investments during the period. The owner’s capital balance at the end of the period is $96,000. The amount the owner withdrew for personal use during the period is

Multiple Choice



$80,000.



$37,000.



$21,000.



$16,000.

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



A. Goody, Capital 28,000

Income Summary 4,000

Sales 24,000

________________________________________



Sales 24,000

A. Goody, Capital 24,000

________________________________________



Sales 24,000

Income Summary 24,000

________________________________________



Income Summary 24,200

Sales 24,000

Sales Discounts 200

________________________________________

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

Multiple Choice



Payroll Taxes Expense



Miscellaneous Income



Medicare Tax Payable



Sales

Which of the following accounts will NOT appear on the post-closing trial balance?

Multiple Choice



Prepaid Advertising



Wages Payable



Equipment



Wages Expense

Which of the following accounts is not closed at the end of the accounting period?

Multiple Choice



Sales



Purchases



Depreciation Expense



Accounts Receivable

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 the expense accounts (and cost of goods sold accounts with debit balances) at the end of the accounting period.

Multiple Choice



Income Summary 2,500

A. Goody, Capital 2,500

________________________________________



Purchases 12,000

Salaries Expense 7,500

Income Summary 19,500

________________________________________



Income Summary 19,700

Sales Discounts 200

Purchases 12,000

Salaries Expense 7,500

________________________________________



Income Summary 19,700

Expense Accounts 19,700

________________________________________

For the current fiscal year, Purchases were $245,000, Purchase Returns and Allowances were $8,600, Purchase Discounts were $2,200 and Freight In was $32,000. If the beginning merchandise inventory was $60,000 and the ending merchandise inventory was $75,000, the Cost of Goods Sold is:

Multiple Choice



$272,800



$281,200



$251,200



$266,200

The beginning capital balance shown on a statement of owner’s equity is $64,000. Net income for the period is $23,000 and the owner withdrew $30,000 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



$64,000.



$57,000.



$117,000.



$71,000.

For the current fiscal year, Purchases were $187,000, Purchase Returns and Allowances were $4,200 and Freight In was $10,500. If the beginning merchandise inventory was $98,000 and the ending merchandise inventory was $103,000, the Net Delivered Cost of Purchases is:

Multiple Choice



$187,000



$172,300



$193,300



$201,700

Which of the following accounts is not closed at the end of the accounting period?

Multiple Choice



Sales



Depreciation Expense



Interest Expense



Accumulated Depreciation

Which of the following statements is not correct?

Multiple Choice



The worksheet is the source of data for the general journal entries required to close the temporary accounts.



Closing the Revenue accounts is the first step in the closing process.



In the closing process, the balance of the owner’s drawing account is transferred to the debit side of the owner’s capital account.



In the closing process, the balance of the Purchases account is transferred to the Merchandise Inventory account.

Which of the following accounts is not closed at the end of the accounting period?

Multiple Choice



Sales



Depreciation Expense



Capital



Purchase Discounts

Which of the following would not be classified as a Current Asset:

Multiple Choice



Cash



Equipment



Accounts Receivable



Supplies

Which of the following is not a selling expense:

Multiple Choice



Delivery Expense



Advertising Expense



Rent Expense on the office



Sales Salaries Expense

Which of the following statements is correct?

Multiple Choice



The term single-step income statement is sometimes used to describe a classified income statement.



Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement.



If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.



Sales less Operating Expenses equals Gross Profit.

The Income Summary account, for Edgar’s Cigars appears below. Based on the data contained in the account, determine which of the statements below is correct.

Income Summary

12/31 beg inv. 7,000 12/31 ending inv. 3,000

12/31 expenses 25,000 12/31 revenues 36,000

Multiple Choice



Edgar’s Cigars will report net income of $11,000 for the period ending 12/31



Edgar’s Cigars will report an $11,000 net loss for the period ending 12/31



Edgar’s Cigars will report net income of $7,000 for the period ending 12/31



Edgar’s Cigars will report a $7,000 net loss for the period ending 12/31

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 the owner’s withdrawal account at the end of the accounting period.

Multiple Choice



debit R. Holloway, Drawing $500 credit R. Holloway, Capital for $500.



debit Income Summary $500 and credit R. Holloway, Drawing for $500.



debit R. Holloway, Drawing $500 and credit Income Summary for $500.



debit R. Holloway, Capital $500 and credit R. Holloway, Drawing for $500.

Which of the following statements is not correct?

Multiple Choice



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



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.



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

In the general journal, reversing entries are dated as of

Multiple Choice



any day during the month of the new fiscal period.



the first day of the new fiscal period.



the last day of the old fiscal period.



any time before the end of the fiscal period.

The accountant of Randy’s Flooring has closed all of the temporary income statement accounts. The accountant is now ready to close the Income Summary account. The owner of the company is R. Car. Using the Income Summary T-account below, determine the correct closing entry the accountant needs to make in order to close the account.

Income Summary

12/31 beg inv. 2,000 12/31 ending inv. 5,000

12/31 exp. 42,000 12/31 rev. 85,000

Multiple Choice



Income Summary 46,000

R. Car, Capital 46,000

________________________________________



R. Car, Capital 90,000

Income Summary 90,000

________________________________________



R. Car, Capital 46,000

Income Summary 46,000

________________________________________



Income Summary 43,000

R. Car, Capital 43,000

________________________________________

Which of the following should be classified as a General and Administrative Expense on a Multi-Step Income Statement:

Multiple Choice



Insurance Expense



Delivery Expense



Sales Salaries Expense



Advertising Expense

Prepaid expenses appear in the

Multiple Choice



Operating Expenses section of the income statement.



Other Expenses section of the income statement.



Current Liabilities section of the balance sheet.



Current Assets section of the balance sheet.

An income statement that has one total for all revenues and one total for all expenses is known as a

Multiple Choice



classified income statement.



single-step income statement.



categorized income statement.



multiple-step income statement.

For the current fiscal year, Purchases were $187,000, Purchase Returns and Allowances were $4,200 and Freight In was $10,500. If the beginning merchandise inventory was $98,000 and the ending merchandise inventory was $103,000, the Cost of Goods Sold is:

Multiple Choice



$193,300



$167,300



$196,700



$188,300

Which of the following groups of accounts will have zero balances after the closing process is completed?

Multiple Choice



Allowance for Doubtful Accounts and Uncollectible Accounts Expense



Depreciation Expense and Accumulated Depreciation—Equipment



Purchases and Purchases Returns and Allowances



Merchandise Inventory and Sales

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