True/False
Indicate whether the sentence or statement is true
or false.
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| 1. | All
accounts are listed on the work sheet regardless of whether there is a balance or not.
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| 2. | Adjustments are planned in the Trial Balance columns of a work sheet.
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| 3. | The
income summary account is one of the accounts used to adjust the merchandise inventory account at the
end of the fiscal period.
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| 4. | The
inventory of supplies at the end of a fiscal period is determined by actually counting the amount of
supplies on hand.
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Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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| 5. | Preparing a work sheet at the end of each fiscal period is an application of the
accounting concept ____. a. | Accounting Period Cycle | c. | Matching Expenses with Revenue | b. | Adequate
Disclosure | d. | Historical
Cost | | | | |
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| 6. | The
amount of goods on hand for sale to customers is ____. a. | a merchandise
inventory | c. | a schedule of
goods on hand | b. | an inventory | d. | a purchases inventory | | | | |
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| 7. | The
entry to journalize the adjustment for merchandise inventory at the end of a fiscal period when
ending merchandise inventory is smaller than the beginning is ____. a. | debit
Merchandise Inventory; credit Income Summary | b. | debit Income
Summary; credit Merchandise Inventory | c. | debit Merchandise Inventory; credit capital
account | d. | debit capital account; credit Merchandise
Inventory | | |
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| 8. | The
entry to journalize the adjustment for merchandise inventory at the end of a fiscal period when the
ending merchandise inventory is larger than beginning merchandise inventory is ____. a. | debit
Merchandise Inventory; credit Income Summary | b. | debit Income
Summary; credit Merchandise Inventory | c. | debit Merchandise Inventory; credit capital
account | d. | debit capital account; credit Merchandise
Inventory | | |
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| 9. | The
entry to journalize the adjustment for merchandise inventory when beginning Merchandise Inventory is
$125,000.00 and ending Merchandise Inventory is $115,000.00 is ____. a. | debit
Merchandise Inventory, $10,000.00; credit Income Summary, $10,000.00 | b. | debit Income
Summary, $10,000.00; credit Merchandise Inventory, $10,000.00 | c. | debit
Merchandise Inventory $115,000.00; credit Income Summary, $115,000.00 | d. | debit Income
Summary, $115,000.00; credit Merchandise Inventory, $115,000.00 | | |
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| 10. | The
entry to journalize the adjustment for office supplies at the end of a fiscal period is
____. a. | debit
Supplies-Office; credit Supplies Inventory | b. | debit Supplies Inventory; credit
Supplies-Office | c. | debit Supplies-Office; credit Supplies
Expense-Office | d. | debit Supplies Expense-Office; credit
Supplies-Office | | |
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| 11. | The
entry to journalize the adjustment for office supplies at the end of a fiscal period when the balance
of the office supplies account is $5,100.00 and the office supplies inventory is $3,900.00 is
____. a. | debit Supplies
Expense-Office, $1,200.00; credit Supplies-Office, $1,200.00 | b. | debit Supplies
Expense-Office, $3,900.00; credit Supplies-Office, $3,900.00 | c. | debit
Supplies-Office, $1,200.00; credit Supplies Inventory, $1,200.00 | d. | debit Supplies
Expense-Office, $3,900.00; credit Supplies Inventory, $3,900.00 | | |
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| 12. | The
entry to journalize the adjustment for prepaid insurance at the end of a fiscal period is
____. a. | debit Prepaid
Insurance; credit Cash | b. | debit Cash; credit Prepaid Insurance | c. | debit Insurance
Expense; credit Prepaid Insurance | d. | debit Prepaid Insurance; credit Insurance
Expense | | |
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| 13. | The
entry to adjust prepaid insurance at the end of a fiscal period when the balance of the prepaid
insurance account is $3,600.00 and the value of the prepaid insurance is $1,600.00 is
____. a. | debit Insurance
Expense, $1,600.00; credit Prepaid Insurance, $1,600.00 | b. | debit Insurance
Expense, $2,000.00; credit Prepaid Insurance, $2,000.00 | c. | debit Prepaid
Insurance, $1,600.00; credit Insurance Expense, $1,600.00 | d. | debit Prepaid
Insurance, $2,000.00; credit Insurance Expense, $2,000.00 | | |
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| 14. | On a
work sheet, Sales is extended to the ____. a. | Income Statement Debit column | c. | Balance Sheet Debit column | b. | Income Statement
Credit column | d. | Balance Sheet
Credit column | | | | |
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| 15. | When
a work sheet is completed, net income will appear in the ____. a. | Income Statement
Debit and Balance Sheet Credit columns | b. | Income Statement Credit and Balance Sheet Debit
columns | c. | Income Statement Debit and Income Statement Credit
columns | d. | Balance Sheet Debit and Balance Sheet Credit
columns | | |
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