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Write 'T' if the statement is true and 'F if the statement is false. 1) Accrual accounting records the effect of every business transaction as it occurs. 1) 2) Under accrual accounting, revenues are recorded when cash is received and expenses are recorded when incurred. 2) 3) The adjusting entry to record $500 of expired insurance would include a debit to insurance expense. 3) 4) Adjusting entries only involve income statement accounts. 4) 5) The process of allocating the cost of property, plant and equipment to expense over their useful lives is called amortization. 5) 6) The adjusting entry to record accrued salaries includes a debit to salary expense. 6) 7) 7) The financial statements will contain errors if they are prepared before the adjusting entries are completed 8) The income statement should be prepared after the balance sheet is prepared. 8) 9) 9) When a prepaid expense is recorded initially as an asset, the adjusting entry transfers the used portion of the asset to the expense account. 10) 10) Adjusting journal entries impact both the income statement and the balance sheet CM ENG 12:48 AM ST 2020-10-16 W o 31 Type here to search Screenshot (8).png ee all photos + Add to 22 Edit & Create Share TRUE/FALSE. Write T if the statement is true and 'F if the statement is false. 1) The work sheet is used only for accounts that are adjusted. 1) 2) The unadjusted trial balance columns of a work sheet contain the account balances that appear on the financial statements, 2) 3) On the work sheet, the difference between the balance sheet debit column and the balance sheet credit column represents the net income or net loss, 3) 4) Closing the accounts consists of journalizing and posting entries, which will zero out all temporary accounts. 4) 5) Capital, expenses, and withdrawals are all closed to the income summary account. 5) 6) The closing process applies to only balance sheet accounts. 6) 7) The closing process applies to only to income statement accounts 7) 8) The entry to close the withdrawals account would include a credit to the income summary account 8) 9) Property, plant and equipment are shown before current assets on a classified balance sheet. 9) 10) The withdrawals account is a temporary account and it must be closed. 10) 11) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 11) A work sheet is a: A) multicolumn document used by accountants to aid in the preparation of the financial statements B) formal document required by creditors C) formal document required by the Canada Revenue Agency D) formal document shown with a company's annual report 12) 12) If the unearned service revenue account had an unadjusted normal balance of $1,800, and an adjustment was made debiting the account for $1,500, the account would appear on the adjusted trial balance of the work sheet asa: A) $6,300 credit B) $3,300 credit C) 54,800 debit D) $3,300 debit ON Type here to search o Di g ENG 12:49 AM ST 2020-10-16 D Fit 13) - 13) If the prepaid rent account hnd an unadjusted normal balance of $13,400, and an adjustment was made crediting the account for $1,800, then the account would appear on the work sheet as an A) $1,800 credit balance in the income statement columns B) 51.800 credit balance in the balance sheet columns C) $12,600 credit balance in the adjusted trial balance columns D) $11,600 debit balance in the balance sheet column 14) 14) Accumulated amortization is found the: A) trial balance credit column, adjustments credit column, adjusted trial balance credit column, and balance sheet credit column of a worksheet B) trial balance credit column and income statement debit column of a worksheet trial balance debit column, adjustments debit column, adjusted trial balance credit column and income statement credit column of a worksheet D) trial balance credit colunu, adjustments credit column, adjusted trial balance credit column, and balance sheet debit column of a worksheet 15) 15) An error has been made on the work shwet it A) the trial balance columns and the adjusted trial balance columns are not equal B) the unadjusted trial balance column is in balance C) the adjusted trial balance debit column and credit column do not equal D) the income statement columns do not equal the balance sheet columns 16) 16) Revenues total $20,200, expenses total 517,300, and the owner's withdrawals account has a balance of $2,600. What is the balance in the income summary account after all dosing entries are completed? A) $2,900 credit B) $2,900 debit 50 D) $2,600 credit 17) 17) Revenues total $20,200, expenses total $17,300, and the owners withdrawals account has a balance of $12,600. What is the balance in the income summary account prior to closing net income ornet loss? A) 5300 credit B) 5300 debit C) 52.900 debat D) $2,900 credit 15) 18) Uneamed fees appears on the A) balance sheet credit column and adjusted trial balance credit column of a worksheet B) adjusted trial balance debat column and balance sheet credit column of a worksheet adjusted trial balance debit column and income statement credit column of a work sheet D) does not appear on a worksheet 19) The owner's capital account has a January 1, 2010, balance of $99,000. The owner's withdrawals account has a balance of $25,600 for the year ending December 31, 2010. The income summary account contains a debit for $20,500 and a credit for $56,900. The balance in the ovener's capital account on December 31, 2010, is: A) $69.00 B) $10,800 C) $90,300 D) 595,00 19) 20) 20) Unmanned service reverse has a balance that is $2.800 less in the worksheet's balance sheet credit column than in the worksheet's trial balance credit column. From this data, it can be determined that: A) service revenue was credited for $2.800 in the adjustments columns B) wrvice revenue was debited for $2.800 in the adjustments columns C) uncated service revenue was credited for $2,800 in the adjustments columns D) rearned service revenue was credited for $2.800 in the adjusted trial balance columns . XE RUE FALSE. Write T if the statement is true and F if the statement is false. 1) 2) 3) 4) 1) Inventory is a current liability on the balance sheet. 2) Credit terms of 1/15 n/30 means the purchaser can deduct 1% of the invoice price if paid within 15 days. 3) FOB shipping point means that the title to the goods passes to the purchaser upon receipt of the goods and the seller is responsible for the cost of the freight 4) When the seller accepts a return of undamaged goods from the purchaser, the seller's journal entries would include two entries, if they are using a perpetual inventory system 5) A single-step format of the income statement will always have fewer sub-totals than the multi-step income statement format 6) There is no such thing as too high an inventory tumover ratio. 7) Goods and services taxes add an extra cost to the value of inventory 8) Net purchases caption on the multi-step income statement is calculated by subtracting purchase discounts and purchase returns and allowances from purchases. 9) The faster the sale of inventory and the collection of cash, the higher the profits will be for a business. 5) 6) 7) 8) 9) 10) 10) Sales discounts is a contra account and has a normal credit balance. MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. 11) Inventory held by a business is a(n) and when sold becomes ain) 11) A) asset, contra asset B) liability, asset C) liability, withdrawal D) asset, expense 12) Sales revenue minus sales returns and allowances and sales discounts equals: 12) A) cost of goods sold B) net sales C) income from operations D) gross margin 13) 13) Using a perpetual inventory system, the entry to record the purchase of merchandise on account involves a: A) debit to inventory B) credit to cash C) credit to inventory D) debit to accounts payable 14) 14) Credit terms of 1/10 1/30 indicates that the buyer is: A) allowed a 1% discount if payment is made within 10 days B) allowed a 10% discount if payment is made within 30 days allowed a 1% discount if payment is made within 30 days D) allowed a 30% discount if payment is made within 10 days 15) 16) 17) 18) 15) Which of the following credit terms allow for a cash discount? A) 1/60 B) 1/10 1/30 ) 1/com D) 1/30 16) A company makes a purchase of $2,000 of inventory, subject to credit terms of 3/10 r/45 and returns $500 of inventory prior to payment. What is the amount of the payment assuming payment is made within the discount period? A) $1,455 B) $1,500 C) $1,560 D) $1,440 17) If a purchaser returns goods purchased on account to the supplier under a perpetual inventory system, the purchaser would debit: A) accounts receivable and credit inventory B) accounts payable and credit inventory C) inventory and credit accounts payable D) inventory and credit accounts receivable 18) When the seller accepts a return of goods from the purchaser originally sold on account, the seller's journal entry would include a debit to: A) sales returns and allowances and credit to sales discounts B) sales returns and allowances and credit to accounts receivable C) sales revenue and credit to cash D) sales discounts and credit to cash 19) Mars Company purchased $2,500 of merchandise on account, terms 3/10 1/60. If payment was made within the discount period, the entry to record the payment under a perpetual inventory system would include a credit to: A) cash of $2,425 B) cash for $2,400 accounts payable of $2,400 D) inventory of $2,352 20) The seller is responsible for the shipping costs when the shipping terms are: A) FOB destination B) COD destination C) COD shipping point D) FOB shipping point 19) 20) TRUE/FALSE. Write 'Tif the statement is true and Fif the statement is false. 1) 1) The two main types of inventory systems are the perpetual system and the periodic system. 2) Under moving-weighted average cost method, the cost of goods sold is based on the oldest purchases 2) 3) It is necessary to do a physical count of inventory when using a perpetual inventory system 3) 4) The specific-unit-cost method is useful for inventory items that have a distinctive identity. 4) 5) 5) Under the FIFO method, ending inventory is valued based on the most recent purchases 6) Once an inventory method is selected by a business, the consistency characteristic of accounting would require that this method be used from year to year 6) 7) An inventory count must be done at least once per year. 7) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 8) A FIFO perpetual inventory system: A) assigns the most recent costs to ending inventory B) reports the oldest costs for ending inventory values C) does not match the typical physical flow of goods D) assigns the most recent costs to cost of goods sold when goods are sold 9) 9) Inventory is classified: A) as a current asset on the balance sheet B) as a property, plant, and equipment asset on the balance sheet C) as a current liability on the balance sheet D) as either an investment or a current asset on the balance sheet 10) 10) Which of the following is not an acceptable inventory cost method? A) first-in, first-out B) specific unit-cost C) weighted average cost D) last-out, first-in