1. Which one of the following accounts will not have a zero balance after all closing entries have been made at year end? a. Wages expense b. Service revenue c. Insurance expense d. Accumulated depreciation.

2. The beginning inventory for a merchandising firm was $68,000 and the ending inventory is $62,000. If the net cost of purchases was $90,000 and net sales were $160,000, The gross profit was: a. $84,000 b. $64,000 c. $70,000 d. None of the above.

3. The ABC Company paid cash for prepaid insurance. As a result of this accounting event: a. total assets were unaffected. b. total equity increased. c. total liabilities decrease. d. none of the above.