1. An important purpose of closing entries is to * A. adjust the accounts in the ledger B. set nominal account balances to zero at the start of the next period C. set real account balances to zero at the start of the next period D. help in preparing the nancial statements 2. II no adjustments are needed for a particular entity, its * A. post-closing trial balance will be identitical to its trial balance B. adjusted trial balance will be identitical to its post-closing trial balance C. trial balance will be identitical to its adjusted trial balance D. trial balance, adjusted trial balance, and post-closing trial balance will be identical 3. The primary purpose of reversing entries is to * A. correct errors B. simplify the bookkeeping associated with accruals from the prior period C. transfer the balance of the expense accounts to the Owner's Capital account and set the accounts equal to Zero. D. place the expense for the current period in the proper accounts 4. Which of the following accounts could appear in an adjusting entry, closing entry and reversing entry? * A. Interest income B. Salaries payable C. Depreciation expense - buildings D. Accumulated depreciaton - buildings 5. In which financial statements does income summary appear? * A. Income statement B. Statement of changes in equity C. Balance sheet D. It does not appear in any financial statement 6. When an entity has suffered a loss, the loss amount is entered on the work sheet on the * A. debit side of the income statement columns and credit side of the balance sheet columns B. Credit side ofthe income statement columns and debit side of the balance sheet oolumns C. debit side of both the income statement and the balance sheet columns. D. Credit side of both the income statement and the balance sheet columns. 7. The bill of lading is a document prepared by the seller detailing the terms of delivery. * A. True B. False 3. The purchase of equipment not for resale should be debited to the purchases account. * A. True B. False 9. Taking a physical inventory refers to making a count of all merchandise on hand at a particular time. * A. True B. False 10. For a merchandising entity, the difference between net sales and operating expenses is called gross prot. * A. True B. False 11. Suppose an entity purchases P50,000 goods on credit. The journal entry should be: * A. Dr. Purchases Cr. Cash B. Dr. Accounts payable Cr. Purchases C. Dr. Purchases Cr. Accounts payable D. Dr. Accounts receivable Cr. Accounts payable 12. Which of the following equations correctly shows the meaning of net sales? " A. Net sales = gross sales - purchases B. net sales = Gross sales - sales returns C. Net sales = Gross sales - Purchases returns D. Net sales = Gross sales - Sales returns - Transportation Out 13. A supplier offers the following discounts: Trade discounts of 10% at list price and another cash discount of 5% if paid in full before the due date. How much is to be paid if a customer pays before due date at list price of P16,000? * A. P131580 B. P15.520 C. P14.000 D. P16'000 14. The collection of a P4'000 account within the 2% discount period would result in a * A. credit to Accounts receivable for P3920 B. credit to cash for P3,920 C. debit to accounts receivable for P3320 D. debit to sales discounts for P80 15. Assuming that net purchases was P450000 during the year and that ending inventory was P10.000 less than the beginning merchandise inventory of P125000, how much was the cost of goods sold? * A. P565,000 B. P335,000 C. P460,000 D. P535000 A. credit to Accounts receivable for P3320 B. credit to cash for P3320 C. debit to accounts receivable for P3320 D. debit to sales discounts for P80 15. Assuming that net purchases was P450 .000 during the year and that ending inventory was P10300 less than the beginning merchandise inventory of P125300. how much was the cost of goods sold? * A. P565300 B. P335300 C. P460300 D. P535300 16. Under a periodic inventory system. the entry to record a purchase of P120300 with terms 2110. nl30 would include a * A. credit to Accounts payable for P120300 B. credit to purchases for P120300 C. debit to Accounts payable for P117300 D. debit to purchases discounts for P2,400. 1?. Michael Traders purchased merchandise from San Agustin Suppliers for P5.400 list price, subject to a trade discount of 25%. The goods were purchased on terms of 2110, m'30 F.0.B. Destination. Michael paid P150 transportation costs. Michael returned P600 (list price) of the merchandise to San Agustin and later paid the amount due within the discount period. The amount paid is. * A. P3331 B. P3378 C. P3369 D. P3328 18. The December 31, 2021, trial balance for lnday Company included the following purchases: P140300; purchases returns and allowances, P7300; transportation in, P10.500; ending inventory was P28,000. What was the cost of goods sold for 2021'? * A. P136300 B. P115300 C. P133300 D. None of the above 19. John traders started operating in 2021. For the year ended 2021, the sales. purchases and closing inventory are P500300 . P200300 and P10300, respectively. What is the amount of cost of goods sold for the year 2021 ? * A. P190300 B. P200300 C. PTQO. 000 D. P800300 20. John traders started operating in 2021. For the year ended 2021, the sales. purchases and closing inventory are P500300 , P200300 and P10300, respectively. What is the amount of gross prot for the entity? * A. P200300 B. P300300 C. P310300 D. P490300