Reference no: EM132792959

Problem 1: The Income Summary account has a $25,000 credit balance after the revenue and expenses accounts have been closed. To which account is this balance closed?

A) The Sales Revenue account

B) The Owner's Withdrawals account

C) The Cost of Goods Sold account

D) The Owner's Capital account

Problem 2: Where do inventory and cost of good sold appear?

A) On the income statement and statement of cash flows, respectively

B) On the balance sheet and statement of owner's equity, respectively

C) On the balance sheet and income statement, respectively

D) On the statement of owner's equity and income statement, respectively

Problem 3: Which of the following is subtracted from net sales revenue to arrive at gross profit?

A) Sales discounts and sales returns and allowances

B) Cost of goods sold

C) Operating expenses

D) Cost of goods available for sale