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1) The two main inventory accounting systems are A purchase and sale. B cash and accrual. C perpetual and periodic. D returns and allowances.
1) The two main inventory accounting systems are
A purchase and sale.
B cash and accrual.
C perpetual and periodic.
D returns and allowances.
2) 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
3) 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.
4) 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
5) 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.
6) 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.
7) 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.
8) 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
