1. A classified balance sheet provides more information about the company to:

A.

creditors

B.

owners

C.

suppliers.

D.

All of the above answers are correct.

2. In what category on a classified balance sheet is Accounts Receivable found?

A.

Current assets

B.

Current Liabilities

C.

Plant, Property and Equipment

D.

Long Term Assets

3. Merchandise purchased for resale under the perpetual inventory method is added to:

A.

Merchandise Inventory

B.

Supplies Expense

C.

Purchases.

D.

Sales.

4. Administration expenses are found in the Operating Expense section of the income statement.

True

False

5. How is Income Summary closed if the company had a net income?

A.

Debit capital; credit withdrawals

B.

Debit Capital; credit Income Summary

C.

Debit Income Summary; credit Capital

D.

Debit Withdrawals; credit Capital

6. Closing entries:

A.

Can be done before adjusting entries

B.

are posted to the general ledger.

C.

are done to update the balance sheet.

D.

are done to update Cash.

7. The entry to adjust salaries was done twice. This error would cause:

A.

Assets to be understated

B.

liabilities to be overstated.

C.

revenue to be understated.

D.

assets to be overstated.

8. Which of the following transactions could cause the Income Summary account to be debited and Capital to be credited?

A.

The business earned a net loss for the period

B.

A credit balance in the Owner's Withdrawals account.

C.

Closed the Owner's Capital account

D.

The business earned a net income for the period.

9. The

postclosing

trial balance is prepared from:

A.

The trial balance columns on the worksheet

B.

the income statement column on the worksheet.

C.

the general ledger.

D.

the balance sheet columns on the worksheet.

10. Beginning inventory is adjusted by debiting Merchandise Inventory and crediting Income Summary True/ False