1.) Under a periodic inventory system, closing entries will include

A.) credits to the Allowance for Doubtful Accounts

B.) adjustments to the merchandise inventory account to match physical inventory

C.) debits to Sales, Purchases Returns and Allowances, and Purchases Discounts

D.) All of these choices are correct.

2.) Which of the accounts below would not appear in the balance sheet columns of the end-of-period spreadsheet?

A.) Unearned Revenue

B.) Cash

C.) Service Revenue

D.) Common Stock

3.) Which of the following entries records the payment of a bill for your insurance premium?

A.) debit Prepaid Insurance; credit Cash

B.) debit Cash; credit Prepaid Insurance

C.) debit Insurance Payable; credit Accounts Receivable

D.) debit Accounts Payable; credit Cash

4.) As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $910,313 and liabilities of $277,004. During Year 2, stockholders invested an additional $28,159 of capital stock and received $25,170 in dividends from the business. What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $985,908, and liabilities were $233,346?

A.) $43,658

B.) $25,170

C.) $116,264

D.) $75,595

5.) Merchandise is ordered on November 10; the merchandise is shipped by the seller and the invoice is prepared, dated, and mailed by the seller on November 15; the merchandise is received by the buyer on November 18; the entry is made in the buyer's accounts on November 21. The credit period begins with what date?

A.) November 18

B.) November 21

C.) November 15

D.) November 10

6.) Use the adjusted trial balance for Stockton Company below to answer the questions that follow.

Stockton Company
Adjusted Trial Balance
December 31
Cash	7,530
Accounts Receivable	2,100
Prepaid Expenses	700
Equipment	13,700
Accumulated Depreciation		1,100
Accounts Payable		1,900
Notes Payable		4,300
Common Stock		1,000
Retained Earnings		12,940
Dividends	790
Fees Earned		9,250
Wages Expense	2,500
Rent Expense	1,960
Utilities Expense	775
Depreciation Expense	250
Miscellaneous Expense	185
Totals	30,490	30,490

Determine the total liabilities for the period.

A.) $6,200

B.) $4,300

C.) $1,900

D.) $20,240

7.) The type of account and normal balance of Unearned Consulting Fees is

A.) revenue, credit

B.) liability, debit

C.) expense, debit

D.) liability, credit

8.) Which of the following is not true with a double-entry accounting system?

A.) The accounting equation remains in balance.

B.) The sum of all debits is always equal to the sum of all credits in each journal entry.

C.) Every transaction affects at least two accounts.

D.) Each business transaction will have two debits.

9.) Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?

A.) Accounts ReceivableStanton, debit $20,000; Sales, credit $20,000

B.) Accounts ReceivableStanton, debit $19,600; Sales, credit $19,600, and Accounts ReceivableStanton, debit $500; Cash, credit $500

C.) Accounts ReceivableStanton, debit $20,100; Sales, credit $20,100

D.) Accounts ReceivableStanton, debit $20,000; Sales, credit $20,000, and Delivery Expense, debit $500; Cash, credit $500

10.) Which of the following has steps of the accounting cycle in proper sequence (some steps may be missing)?

A.) analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and prepare a post-closing trial balance

B.) prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger

C.) prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries

D.) analyze and record transactions, post transactions to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries

11.) What is the purpose of the adjusted trial balance?

A.) to verify that the debits and credits balance

B.) to verify that all of the adjusting entries have been posted

D.) to verify that the net income (loss) is correctly reported

E.) to verify that no adjusting journal entry has been omitted

12.) Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $219,019. The Focus Company initially offered to buy the land for $179,993. The companies settled on a purchase price of $211,232. On the same day, another piece of land on the same block sold for $231,064. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?

A.) $231,064

B.) $211,232

C.) $219,019

D.) $179,993

13.) Which one of the statements below is not a purpose for the journal?

A.) to show increases and decreases in accounts

B.) to show a chronological order by date

C.) to help locate errors

D.) to show a complete transaction in one place

14.) Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?

A.) A payment of $67 for insurance was posted as a debit of $76 to Prepaid Insurance and a credit of $76 to Cash.

B.) A transaction was not posted.

C.) Cash received from customers on account was posted as a debit of $720 to Cash and a credit of $720 to Accounts Payable.

D.) A payment of $4,450 to a creditor was posted as a debit of $4,500 to Accounts Payable and a credit of $450 to Cash

15.) A sales invoice included the following information: merchandise price, $12,000; terms 1/10, n/eom; FOB shipping point with prepaid freight of $900 added to the invoice. Assuming that a credit for merchandise returned of $500 is granted prior to payment and that the invoice is paid within the discount period, what is the amount of cash that should be received by the seller?

A.)$11,500

B.) $12,285

C.) $11,385

D.) $10,480

16.) Using the following information, what is the amount of net income?

Purchases	$32,000		Selling expense	$ 960
Merchandise inventory, September 1	5,700		Merchandise inventory, September 30	6,370
Administrative expense	910		Sales	63,000
Rent revenue	1,200		Interest expense	1,040

A.) $29,510

B.) $28,310

C.) $29,350

D.) $29,960

17.) A retailer purchases merchandise with a catalog list price of $30,000. The retailer receives a 15% trade discount and credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?

A.)$30,000

B.) $24,900

C.) $24,990

D.)$29,400

18.) Earning revenue

A.)increases one asset, decreases another asset

B.) decreases assets, increases liabilities

C.) increases assets, increases stockholders' equity

D.) increases assets, decreases stockholders' equity

19.) A chart of accounts for a merchandising business

A.) usually is the same as the chart of accounts for a service business

B.) usually is standardized by the FASB for all merchandising businesses

C.) usually requires more accounts than does the chart of accounts for a service business

D.) always uses a three-digit numbering system

20.) Merchandise with an invoice price of $6,000 is purchased on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $200. What is the required payment if paid on A.) $5,940

B.)$6,120

C.) $6,090

D.) $5,880

21.) If a shareholder wanted to know how money flowed into and out of the company, which financial statement would the shareholder use?

A.) balance sheet

B.) statement of cash flows

C.) income statement

D.) statement of retained earnings