MULTIPLE CHOICE QUESTIONS-Choose the best answer. Use the dropdown. B What is the formula for the income statement? A. Assets = Liabilities + Owner's Equity B. Revenues - Expenses = Net Income C. Debits = Credits D. Beginning Capital + Net Income - Drawings # Ending Capital Which of the following accounts would appear on the income statement? A. Depreciation Expense B. Accumulated Depreciation Equipment C. Supplies D. Prepaid Insurance AA! 3 Which of the followin accounts would be considered a liability? A. Accounts Receivable B. Johnson Capital C. Unearned Revenue D. Rent Expense 3 4 D 4 Nelson purchases inventory for $3,000 with terms 2/10,n/30. If Nelson pays within the discount period, how much will Nelson pay? A. $2,700 B. $3,000 C.$3,060 D. $2,940 S 16 17 5 B Williams determined that $500 of inventory was damaged during a hurricane. The inventory account will be credited, but which account will get debited? 18 19 A. Sales B. Cost of Goods Sold C. Miscellaneous Revenue D. Unearned Revenue 20 21 6 Choose: Clark purchased a one-year Insurance policy for $2,400 on January 1. What is the amount of the 22 insurance expense on January 31? A. 2,400 B. $500 C. $400 D. $200 23 24 25 7 Choose: 26 Nellie purchased equipment for $3,600 on January 1. The equipment has a 3-year life (36 months) What is the amount of Accumulated Depreciation after three months of adjustments? A. $300 B.$100 C.$3,300 D. $3,500 27 28 29 8 Choose: On which financial statement will the Drawing account appear? A. Income Statement B. Owner's Equity Statement C. Balance Sheet D. None of these 30 31 32 9 Choose: Which of the following accounts is not a current asset? A. Prepaid Insurance B. Inventory C. Accounts Receivable D. Equipment 33 34 35 10 Choose: 36 After closing the revenues and expenses, the income Summary account had a debit total of $14,000 and a credit total of $18,000. What was the amount of the net income? A. $18,000 B. $14,000 - $4,000 D. It was a $4,000 loss 37 38 39 11 Choose: 40 Barney Company purchased merchandise from Solon for $1,000, with terms 2/10,n/30, FOB Shipping Point. Who pays the freight in this case? A. Barney Company B. Solon Company C. Freight Charges are shared D. None of these 41 42 43 12 Choove: 44 Bob puts $1,000 into a bank account that offers 6% interest. How much interest would Bob earn in one month? A. $60 b.$600 c. 55 d. $20 45