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Business
University
PRACTICE QUIZ_COMPLETING THE ACCOUNTING CYCLE
11 questions
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- 1. Multiple Choice
Sales Discounts is shown as a reduction of cost of goods sold in the income statement.
TRUE
FALSE
- 2. Multiple Choice
The contra-revenue accounts, Sales Returns and Allowances and Sales Discounts, should be closed
by crediting these accounts and debiting Income & Expense Summary for each account.
TRUE
FALSE
- 3. Multiple Choice
In a periodic inventory system, Inventory and Cost of Goods Sold accounts are kept up-to-date throughout the accounting period.
TRUE
FALSE
- 4. Multiple Choice
If ending inventory and cost of goods sold are added together, they should equal gross profit.
TRUE
False
- 5. Multiple Choice
The purchases account is closed to the Merchandise Inventory account.
TRUE
FALSE
- 6. Multiple Choice
Cost of goods sold is a major expense of a merchandising business.
TRUE
FALSE
- 7. Multiple Choice
In the worksheet, the ending inventory amount will appear in the income statement credit column and the balance sheet debit column.
TRUE
FALSE
- 8. Multiple Choice
The determination of net purchases would include addition of transportation in account.
TRUE
FALSE
- 9. Multiple Choice
Which of the following accounts is closed by debiting the accounts?
Purchases
Freight-in
Sales returns and allowances
Purchase returns and allowances
- 10. Multiple Choice
In closing the cost of sales account and establishing the merchandise ending inventory, the balancing account would be____
Income & Expense Summary
Gross profit
Merchandise Inventory, beg.
Cost of goods sols
- 11. Multiple Choice
Most probably, the last account which could be listed in the post-closing trial balance is_____
Owner's equity
Rent payable
Owner's Drawing
Income & Expense Summary
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