M P Pavillion received a $840 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $480 and a credit to Service Revenue $480. The correcting entry is

Question 1 options:

a.debit Cash, $840; credit Accounts Receivable, $840.

b.debit Cash, $360 and Accounts Receivable, $480; credit Service Revenue, $840.

c.debit Cash, $360 and Service Revenue, $480; credit Accounts Receivable, $840.

d.debit Accounts Receivable, $840; credit Cash, $360 and Service Revenue, $480.

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Question 2(1.5 points)

2. The income summary account

Question 2 options:

a.is a permanent account.

b.appears on the balance sheet.

c.appears on the income statement.

d.is a temporary account.

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Question 3(1.5 points)

3. Closing entries

Question 3 options:

a.are prepared before the financial statements.

b.reduce the number of permanent accounts.

c.cause the revenue and expense accounts to have zero balances.

d.summarize the activity in every account.

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Question 4(1.5 points)

4.During August, 2014, Wilsons Supply Store generated revenues of $60,000. The companys expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000.

Wilsons gross profit for August, 2014 is

Question 4 options:

a.$20,000.

b.$21,000.

c.$23,000.

d.$24,000.

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Question 5(1.5 points)

5.At the beginning of September, 2014, Grace Company reported Inventory of $8,000. During the month, the company made purchases of $35,600. At September 30, 2014, a physical count of inventory reported $8,400 on hand. Cost of goods sold for the month is

Question 5 options:

a.$35,200.

b.$35,600.

c.$36,000.

d.$43,600.

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Question 6(1.5 points)

6.Which of the following accounts isnotclosed to Income Summary?

Question 6 options:

a.Cost of Goods Sold

b.Inventory

c.Sales Revenue

d.Sales Discounts

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Question 7(1.5 points)

7. An error in the physical count of goods on hand at the end of a period resulted in a $15,000 overstatement of the ending inventory. The effect of this error in the current period is

Cost of Goods SoldNet Income

Question 7 options:

a.UnderstatedUnderstated

b.OverstatedOverstated

c.UnderstatedOverstated

d.OverstatedUnderstated

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Question 8(1.5 points)

8. ABC Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows:

UnitsPer unit priceTotal

Balance, 1/1/14200$5.00$1,000

Purchase, 1/15/141005.30530

Purchase, 1/28/141005.50550

An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

Question 8 options:

a.$800

b.$832

c.$848

d.$868

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Question 9(1.5 points)

9. Joe's Place recorded the following data:

Units Unit

DateReceivedSoldOn HandCost

1/1 Inventory600 $2.50

1/8 Purchased1,0001,600 3.00

1/12 Sold1,200300

The weighted average unit cost of the inventory at January 31 is:

Question 9 options:

a.$2.50.

b.$2.75.

c.$2.81.

d.$3.400.

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Question 10(1.5 points)

10.Inventoriable costs include all of the followingexceptthe

Question 10 options:

a.freight costs incurred when buying inventory.

b.costs of the purchasing and warehousing departments.

c.cost of the beginning inventory.

d.cost of goods purchased.