5 multiple choice questions

1. A companys accounting records indicate that the beginning inventory balance had been $20,000. During the period, the company had purchased $75,000 of inventory and had recognized $100,000 of sales revenue. The companys gross margin percentage is normally 30 percent of sales. Which of the following is the amount of ending inventory (if the gross margin method is used)? $45,000 $30,000 $5,000 $25,000

2. After closing on December 31, Year 1, Briciola Co. had $15,000 of assets, $10,000 of liabilities, and $3,000 of common stock. During Year 2, Briciola Co. earned $2,000 of revenue and incurred $1,500 of expense. Briciola Co. closes its books each year on December 31. Which of the following refers to the balance in the Retained Earnings account as of December 31, Year 2?

$1,500

$2,500

$500

$2,000

3. Recognizing depreciation expense is an example of which transaction?

Asset source transaction

Asset use transaction

Claims exchange transaction

Asset exchange transaction

4. During Year 1, Valentin Co. provided $100,000 of tax consultant services to its clients on account. Valentin Co. has completed the work and sent bills to the clients but has not yet collected any cash. Which of the following statements about Recognizing Accounts Receivable is NOT true?

The increase in Revenue will result in an increase in Retained Earnings.

Valentin Co. will recognize the revenue in Year 1 although the cash has not been collected.

Assets and Liabilities increase on the balance sheet.

The transaction is classified as an Asset Source transaction.

5. An internal document that lists the general ledger account titles and their balances after any adjustments have been made is called what?

Unadjusted Trial Balance

Post-Closing Trial Balance

Adjusted Trial Balance

Daily Trial Balance