1. What is the term applied to sales minus cost of merchandise sold?

gross profit

income from operations

net income

sales

2. Sunshine Service Center received a 120-day, 6% note for $40,000, dated April 12 from a customer on account.

	Determine the due date of the note.
	a. August 10
	b. August 9
	c. August 1
	d. August 11

August 10

August 5

3. Which of the following types of accounts have a normal credit balance?

assets and liabilities

liabilities and expenses

revenues and liabilities

capital and drawing

4. Adjusting entries are

the same as correcting entries

needed to bring accounts up to date and match revenue and expense

optional under generally accepted accounting principles

rarely needed in large companies

5. Current liabilities are

due, but not receivable for more than one year

due, but not payable for more than one year

due and receivable within one year

due and payable within one year

6. Accumulated Depreciation

is used to show the amount of cost expiration of intangibles

is the same as Depreciation Expense

is a contra asset account

is used to show the amount of cost expiration of natural resources

7. Of the following financial reports, which one is the one that will determine if the accounting equation is in balance?

Statement of Owners Equity

Income statement

Balance Sheet

Account reconciliation