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Exam 11: Preparing a Worksheet for a Merchandise Company

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Question 61

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Katelyn Marie's Law Firm's unadjusted trial balance includes the following: $\begin{array} { l l } \text { Cash } & \$ 4,20 t \\\text { Wnearned Legal Fees } & 2,200 \\\text { Legal Fees Revenue } & 14,400\end{array}$ Using the above data,record the adjusting entry for $2,000 of the unearned legal fees earned.

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Question 62

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The beginning inventory is adjusted by crediting Merchandise Inventory and debiting Income Summary.

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Question 63

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Adjustments are journalized before recording them in the worksheet.

Sales would be found on the worksheet in the:

The amount for beginning inventory is needed when calculating Cost of Goods Sold.

Indicate the normal balance of each of the following accounts: a)Purchases Returns and Allowances b)Merchandise Inventory c)Freight-In d)Sales Returns and allowances e)Unearned Revenue

What inventory method is used when the inventory balance is updated only at the end of the accounting period?

The income summary amounts in the income statement columns of the worksheet represent:

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Accumulated } & & & \\\text { depreciation equip. } & & & \\\hline\end{array}$

Sales Discount is used when calculating Net Purchases.

An account never used in an adjusting entry is:

The adjustment for accrued wages was not done; this would cause:

From the following items,which would most likely cause the recording of unearned revenue?

For each of the following, identify in Column 1 the balance the account will have in the adjusted trial balance columns (debit or credit), in Column 2 the financial statement column(s) in which the account balance will be found (income statement or balance sheet), and in Column 3 the effect the account will have on the determination of net income (increase, decrease, or none). - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Salaries expense } & & & \\\hline\end{array}$

The physical count of inventory was incorrect,which overstated the ending inventory.This would cause:

When completing a worksheet:

On the worksheet the beginning Merchandise Inventory account appears in:

Ending inventory:

The normal balance of Rental Income is:

Doug paid $1,200 on a one-year insurance policy on March 1.The entry included a debit to Prepaid Insurance.The adjusting entry on December 31 would include a: