The entry to close the revenue accounts includes

	debits to the respective revenue accounts and a credit to Dividends.
	debits to the respective revenue accounts and a credit to Retained Earnings.
	a debit to Retained Earnings and credits to the respective revenue accounts.
	a debit to Dividends and credits to the respective revenue accounts.

Question

12 of 35

When the bank takes money out of a company's account, why does the bank say that they have debited that account?

	The bank has decreased the company's assets and assets decrease with debits.
	The bank has increased its' liability to the company and liabilities increase with debits.
	The bank has increased the company's assets and assets increase with debits.
	The bank has decreased its liability to the company, and liabilities decrease with debits.

Question

13 of 35

Dividends, Accounts Receivable, and Buildings have normal balances of

	credit, credit, and credit, respectively.
	credit, debit, and debit, respectively.
	debit, debit, and debit, respectively.
	debit, debit, and credit, respectively.

Question

14 of 35

Safety First Supply Company purchased a 2-year insurance policy for $2,500. What would the adjusting entry be at the end of the first year?

	Debit Insurance Expense $2,500, credit Prepaid Insurance $2,500
	Debit Insurance Expense $1,250, credit Cash $1,250
	Debit Insurance Expense $2,500, credit Cash $2,500
	Debit Insurance Expense $1,250, credit Prepaid Insurance $1,250

Question

15 of 35

Recording Interest Receivable would be an example of a(n)

	deferred expense.
	deferred revenue.
	accrued expense.
	accrued revenue.

Question

16 of 35

A company's gross profit percentage increased from 37% to 41%. What does this mean?

	This means that cost of goods sold as a percentage of net sales decreased.
	This means that operating expenses as a percentage of net sales decreased.
	This means that cost of goods sold as a percentage of net sales increased.
	There is not enough information to explain the increase.

Question

17 of 35

Under the periodic inventory system, the amount of inventory is

	only known when a physical count is taken.
	constantly updated.
	adjusted after each sale.
	adjusted after each purchase.

Question

18 of 35

Under the FIFO method, the flow of costs through the accounting records will

	be nearly the opposite of the physical flow of goods through the business.
	closely match the physical flow of goods through the business.
	exactly match the physical flow of goods through the business.
	have no relationship to the physical flow of goods through the business.

Question

19 of 35

Kramer and Associates has the following account balances listed in alphabetical order: Accumulated Depreciation, $23,000; Accounts Payable, $8,500; Accounts Receivable, $12,000; Cash, $3,500; Equipment, $44,000; Land, $21,000; Mortgage Payable, $45,000; Prepaid Insurance, $7,500; Supplies, $2,000; Unearned Revenue, $6,000; Wages payable, $4,500. Kramer and Associates' current liabilities are

	$58,000.
	$13,000.
	$64,000.
	$19,000.

Question

20 of 35

Merchandise returned by the customer for a cash refund is called a

	credit memorandum.
	debit memorandum.
	sales return.
	sales allowance.