1. Which of the following accounts is used only at the close of the accounting period to adjust the merchandise inventory account and summarize the temporary owner's equity accounts?

a. Sales

b. Owner's Capital

c. Cost of Goods Sold

d. Income Summary

2. The following information was taken from the financial statements of Collin's Inn:

Total current assets	$162,000
Average owner's equity	148,000
Beginning inventory	32,000
Ending inventory	36,000
Cost of goods sold	165,000
Net income	37,000

The return on owner's equity for Collin's Inn is

a. 25%.

b. 80%.

c. 27%.

d. 129%.

3.

The following information was taken from the financial statements of Ashley's Linens:

Total current assets	$ 53,000
Property, plant, and equipment	6,000
Current liabilities	21,000
Long-term liabilities	4,000
Owner's equity	34,000
Beginning inventory	31,000
Ending inventory	33,000
Cost of goods sold	152,000
Net income	42,000

The working capital of Ashley's Linens is

a. $33,000.

b. $34,000.

c. $32,000.

d. $38,000.

4.

The heading on a financial statement includes which of the following information, in the order shown?

a. the name of the business, the period of time the statement covers, and the name of the statement

b. the period of time the statement covers, the name of the statement, and the name of the business

c. the name of the statement, the period of time the statement covers, and the name of the business

d. the name of the business, the name of the statement, and the period of time the statement covers

5.

Those obligations that are due within one year or the normal operating cycle of the business and will be paid with money provided by the current assets are called

a. marketable securities.

b. long-term liabilities.

c. investments.

d. current liabilities.