1. Which of the following accounts is not likely to appear in the chart of accounts of a service company? (A) Accounts Receivable; (B) Merchandise Inventory; (C) Depreciation Expense; (D) Income Summary; (E) Cash. ____ _____

2. Which of the following is not true about the work sheet for a merchandising company? (A) It is required by generally accepted accounting principles (GAAP) (B) The purchases account is not adjusted (C) The cost of goods sold account in the unadjusted trial balance is a clue to the inventory method used by the company (D) The inventory short and over account may be part of an adjustment to the trial balance (E) It helps a company prepare its financial statements. ____ _____

3. Which of the following is true about unearned revenue? (A) When the account is credited, Cash is debited; (B) It is a contra-revenue account; (C) When adjusted, a revenue account is debited; (D) It is reported on the income statement; (E) All statements given are false. ____ _____

4. Which of the following accounts would be found under the heading of Cost of Goods Sold in a chart of accounts? (A) Sales; (B) Freight-In; (C) Cash; (D) Supplies; (E) Sales Returns and Allowances. ____ _____

5. An example of a contra-revenue account is (A) Purchases Returns and Allowances; (B) Accumulated Depreciation; (C) Sales; (D) Sales Returns and Allowances; (E) Income Summary. ____ _____

6. In preparing a work sheet, the amounts for the Trial Balance columns are copied from the (A) general journal; (B) sales and purchases journals; (C) general ledger; (D) latest income statement and balance sheet; (E) current chart of accounts. ____ _____

7. Which of the following would never appear in at least one of the formal reports of a merchandising business? (A) Net Loss; (B) Income Summary; (C) Cost of Goods Sold; (D) Purchases; (E) Capital.