Question 46 (2 points) The closing process is necessary in order to: 1) Ensure that all permanent accounts are closed to zero at the end of each accounting period. 2) Ensure that the company complies with state laws. 3) Ensure that net income or net loss and owner withdrawals for the period are closed into the owner's capital account. 4) Ensure that management is aware of how well the company is operating. Question 47 (2 points) Assets, liabilities, and equity accounts are not closed: these accounts are called: 1) Nominal accounts. 2) Temporary accounts. 3) Permanent accounts. 4) Contra accounts Question 48 (2 points) The following information is available for Zephyr Company before closing the accounts. Net Income Zephyr, Capital Zephyr, Withdrawals $ 115,000 110,000 39,000 After all of the closing entries are made, what will be the balance in the Zephyr Capital account? 1) $115.000. 2) $225,000 3) $264,000 4) $186,000. Question 49 (2 points) A classified balance sheet: 1) Organizes assets and liabilities into important subgroups that provide more information. 2) Utilizes a rating system to determine the net value of assets and liabilities. 3) Shows only total assets, liabilities and equity. 4) Reports operating, investing, and financing activities. Question 50 (2 points) The accounting cycle refers to the steps in preparing financial statements. Identify the correct order of the steps below: 1) Prepare adjusted trial balance, analyze transactions, prepare financial statements, closing entries 2) Post entries into ledger, journalize transactions, prepare financial statements, prepare trial balance 3) Adjust and post entries into ledger, prepare financial statements, analyze transactions, prepare post-closing trial balance 4) Analyze and journalize transactions, post entries into ledger, prepare unadjusted trial balance, adjust and post, prepare adjusted trial balance, prepare financial statements, closing entries, post-closing trial balance Question 51 (2 points) Beginning inventory plus net purchases is: 1) Cost of goods sold. 2) Merchandise (goods) available for sale. 3) Ending inventory. 4) Sales. . Question 52 (2 points) Cost of good sold: 1) is another term for merchandise sales. 2) Is the term used for the expense of buying and preparing merchandise for sale. 3) is another term for revenue. 4) Is also called gross margin. Question 53 (2 points) The payment terms 2/10, n/30 means: 1) 10% discount if paid in 2 days, full amount due in 30 days. 2) 2% discount if paid in 30 days. 3) 2% discount if paid in 10 days, full amount due in 30 days. 4) 2/10 discount (20%) if paid in 30 days. Question 54 (2 points) On May 1, Shilling Company sold merchandise in the amount of $5,800 to a customer, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Shilling uses the perpetual inventory system. The journal entry or entries that Shilling will make on May 1 is: 1) Debit Sales $5.800; credit Accounts Receivable $5,800. 2) Debit Sales $5,800; credit Accounts Receivable $5,800. Debit Cost of Goods Sold $4,000: credit Merchandise Inventory $4,000. 3) Debit Accounts Receivable $5.800; credit Sales $5,800. 4) Debit Accounts Receivable $5,800; credit Sales $5,800. Debit Cost of Goods Sold $4,000: credit Merchandise Inventory $4.000. Question 55 (2 points) On May 1, Schilling Company sold merchandise in the amount of $5,800 to a customer, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Schilling uses the perpetual inventory system and the gross method. On May 5, the customer complains that $500 of the merchandise arrived damaged. Schilling offers a price reduction of 40% on the damaged merchandise, which the buyer accepts. On May 10, payment is received from the customer for the total amount due. The entry recorded on May 5th would be: 1) Debit Accounts Receivable $5,800: credit Sales $5,800 2) Debit Sales Returns & Allowances $500; credit Accounts Receivable $500 3) Debit Merchandise Inventory $500: credit Sales $500 4) Debit Sales Returns & Allowances $200: credit Accounts Receivable $200 Question 56 (2 points) On May 1, Schilling Company sold merchandise in the amount of $5,800 to a customer, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Schilling uses the perpetual inventory system and the gross method. On May 5, the customer complains that $500 of the merchandise arrived damaged. Schilling offers a price reduction of 40% on the damaged merchandise, which the buyer accepts. On May 10, payment is received from the customer for the total amount due. The entry recorded on May 10th would be: 1) Debit Cash $5,488 and Sales Discounts $112; credit Sales $5,600 2) Debit Cash $5,800; credit Accounts Receivable $5,800 3) Debit Cash $5,684 and Sales Discounts $116; credit Accounts Receivable $5,800 4) Debit Cash $5,488 and Sales Discounts $112; credit Accounts Receivable $5,600 action 57ainte Question 57 (2 points) Costs included in the Merchandise Inventory account can include all of the following except: : 1) Advertising 2) Transportation-in. 3) Storage 4) Insurance