Chapter 13 Flashcards
Which of the following is the first section within a classified income statement?
A) Operating Expenses
b) Operating Revenue
c) Cost of Goods Sold
d) Other Income
Operating Revenue
Purchases is displayed within which section of a classified income statement?
Cost of Goods Sold
For the current fiscal year, Purchases were $270,000, Purchase Returns and Allowances were $4,200 and Freight In was $21,000. If the beginning merchandise inventory was $170,000 and the ending merchandise inventory was $87,000, the Net Delivered Cost of Purchases is:
$286,800
$270,000 purchases + $21,000 freight in − $4,200 purchases returns and allowances = $286,800 net delivered cost of purchases
Which of the following statements is correct?
a) The term single-step income statement is sometimes used to describe a classified income statement.
b) If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.
c) Salaries of office employees would be grouped with the selling expenses in the operating expenses section of the income statement.
d) Sales less operating expenses equals gross profit.
b) If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.
A company reported gross profit of $77,000, total operating expenses of $41,500 and interest expense of $2,200. What is the net income from operations?
$35,500
$77,000 gross profit − $41,500 operating expenses = $35,500 net income from operations
The balance of the owner’s drawing account is reported:
on the statement of owner’s equity.
The beginning capital balance shown on a statement of owner’s equity is $73,000. Net income for the period is $23,000. The owner withdrew $31,000 cash from the business and made no additional investments during the period. The owner’s capital balance at the end of the period is:
$65,000.
$73,000 beginning capital balance + $23,000 net income − $31,000 owner withdrawal = $65,000 ending capital balance
Which of the following is not a section on a Classified Balance Sheet?
a) Current Assets
b) Long-Term Liabilities
c) Selling Expenses
d) Plant and Equipment
Selling Expenses
Cash, items that will normally be converted to cash, and items that will be used up within one year are called:
current assets.
A total of $8,000 in supplies was purchased during the year. By the end of the year, the company had used up $5,300 of the supplies. The adjusting entry needed at the end of the year is:
debit: supplies expense $5,300
credit: supplies $5,300
Assuming that all accounts have normal balances, the income summary account would be credited within the closing entry for which of the following accounts?
a) Depreciation Expense
b) Accumulated Depreciation
c) Sales
d) Sales Returns and Allowances
c) Sales
Select the closing entry that RB Auto would make at the end of the accounting period to close their revenue accounts and income statement accounts with credit balances.
debit Sales $15,000, debit Purchase Returns and Allowances $200 and credit Income Summary for $15,200
Select the correct closing entry that RB Auto would make to close their expense account(s) at the end of the accounting period.
debit Income Summary $9,000, credit Salary Expense $4,000, credit Rent Expense $3,000 and credit Purchases $2,000
The Sales account will have a zero balance after which entries are posted?
closing entries
Which of the following accounts will appear on the post-closing trial balance?
a) Miscellaneous Income
b) Payroll Taxes Expense
c) Medicare Tax Payable
d) Sales
Medicare Tax Payable
