Reference no: EM132207058

Questions -

Q1) The two main inventory accounting systems are

A. purchase and sale.

B. cash and accrual.

C. perpetual and periodic.

D. returns and allowances.

Q2) What type of income statement reports both gross profit and operating income?

A. multi-step income statement

B. trial income statement

C. single-step income statement

D. subtotal income statement

Q3) The inventory account shows an ending balance of $20,500. An actual count of inventory reveals $20,100 of inventory on hand. The adjusting entry involves

A. debit to inventory for $400.

B. credit to cost of goods sold for $20,100.

C. debit to cost of goods sold for $400.

D. credit to inventory for $20,500.

Q4) Which subtotals appear on a multi-step income statement but do not appear on a single-step income statement?

A. gross profit and income from operations

B. cost of goods sold and net income

C. operating expenses and net income

D. net sales and cost of goods sold

Q5) The income summary account has a $25,000 debit balance after closing the revenue and expense accounts. This balance is closed to the

A. sales revenue account.

B. owner's withdrawals account.

C. cost of goods sold account.

D. owner's capital account.

Q6) The income summary account has a $25,000 debit balance after closing the revenue and expense accounts. This balance is closed to the

A. sales revenue account.

B. owner's withdrawals account.

C. cost of goods sold account.

D. owner's capital account.

Q7) The inventory account shows an ending balance of $20,800. An actual count of inventory reveals $21,200 of inventory on hand. The adjusting entry involves

A. credit to inventory for $20,500.

B. credit to cost of goods sold for $20,100.

C. debit to cost of goods sold for $400.

D. debit to inventory for $400.

Q8) If an income statement reports both gross profit and operating income, which type of income statement format is used?

A. single-step

B. multi-step

C. trial

D. subtotal