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QUESTION 6 The adjusting entry for supplies should be: debit supplies expenses, credit supplies. debit supplies, credit supplies expenses. debit sales, credit prepaid insurance. debit supplies, credit expenses. QUESTION 7 The second part of stockholder equity is called: retained earnings. revenue. net loss. net capital. QUESTION 8 How many financial statements do corporations prepare? O Four O Five Two Three QUESTION 9 The Income Statement of a merchandising business has: five sections. four sections. two sections. three sections. QUESTION 10 The operating income is an excess of: Ogross profit over operating expenses. gross loss over operating expenses. gross profit over cost of merchandise sold. operating expenses over gross profit