Accounting Help
Krafty FoodsIncome StatementFor the Year Ended December 31, 2013($ in Millions)Operating revenues $_____________Cost of Sales $_____________Gross Profit $_____________Marketing, general and administrationExpenses $______________Operating Income $______________Interest and other debt expense, net $______________Income before taxes $______________Income tax expense $______________Net Income $_______________1.Which of the following is in accordance with generally accepted accounting principles?A)Accrual-basis accountingB)Cash-basis accountingC)Both accrual-basis and cash-basis accountingD)Neither accrual-basis nor cash-basis accounting2.Adjusting entries are requiredA)yearly.B)quarterly.C)monthly.D)every time financial statements are prepared.3.Accumulated Depreciation isA)an expense account.B)an owner’s equity account.C)a liability account.D)a contra asset account.4.Depreciation is the process ofA)valuing an asset at its fair value.B)increasing the value of an asset over its useful life in a rational and systematic manner.C)allocating the cost of an asset to expense over its useful life in a rational and systematic manner.D)writing down an asset to its real value each accounting period.5.Unearned revenue is classified asA)an asset account.B)a revenue account.C)a contra-revenue account.D)a liability account.6.At March 1, Psychocandy Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $750 and consumed supplies of $800. If no adjusting entry is made for suppliesA)owner’s equity will be overstated by $800.B)expenses will be understated by $750.C)assets will be understated by $250.D)net income will be understated by $800.7.Stone Roses Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29–31). Employees work 5 days a week and the company pays $1,500 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?A)Salaries and Wages Expense1,500Salaries and Wages Payable1,500B)Salaries and Wages Expense7,500Salaries and Wages Payable7,500C)Salaries and Wages Expense4,500Salaries and Wages Payable4,500D)No adjusting entry is required.8.The adjusted trial balance is preparedA)after financial statements are prepared.B)before the trial balance.C)to prove the equality of total assets and total liabilities.D)after adjusting entries have been journalized and posted.9.Closing entries may be prepared from all of the following exceptA)Adjusted balances in the ledgerB)Income statement and balance sheet columns of the worksheetC)Balance sheetD)Income and owner’s equity statements10.The income statement for the month of June, 2014 of Camera Obscura Enterprises contains the following information:Revenues$7,000Expenses:Salaries and Wages Expense$3,000Rent Expense1,500Advertising Expense800Supplies Expense300Insurance Expense100Total expenses5,700Net income$1,300The entry to close the expense accounts includes aA)debit to Income Summary for $1,300.B)credit to Rent Expense for $1,500.C)credit to Income Summary for $5,700.D)debit to Salaries and Wages Expense for $3,000.11.The income statement for the year 2014 of Fugazi Co. contains the following information:Revenues$70,000Expenses:Salaries and Wages Expense$45,000Rent Expense12,000Advertising Expense10,000Supplies Expense6,000Utilities Expense2,500Insurance Expense2,000Total expenses77,500Net income (loss)$(7,500)The entry to close the revenue account includes aA)debit to Income Summary for $7,500.B)credit to Income Summary for $7,500.C)debit to Revenues for $70,000.D)credit to Revenues for $70,000.12.A current asset isA)the last asset purchased by a business.B)an asset which is currently being used to produce a product or service.C)usually found as a separate classification in the income statement.D)an asset that a company expects to convert to cash or use up within one year.13.On a classified balance sheet, current assets are customarily listedA)in alphabetical order.B)with the largest dollar amounts first.C)in the order of liquidity.D)in the order of acquisition.14.Balance sheet accounts are considered to beA)temporary owner’s equity accounts.B)permanent accounts.C)capital accounts.D)nominal accounts.15.Income Summary has a credit balance of $17,000 in S. Sufjan Co. after closing revenues and expenses. The entry to close Income Summary isA)credit Income Summary $17,000, debit Owner’s Capital $17,000.B)credit Income Summary $17,000, debit Owner’s Drawings $17,000.C)debit Income Summary $17,000, credit Owner’s Drawings $17,000.D)debit Income Summary $17,000, credit Owner’s Capital $17,000.16.The net income (or loss) for the periodA)is found by computing the difference between the trial balance totals and the adjusted trial balance totals.B)is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.C)cannot be found on the worksheet.D)is found by computing the difference between the income statement columns of the worksheet.Instructions: Place a “D” (Debit) or “C” (Credit) on the answer sheet to indicate whether the accountwould be debited or credited for its balance in the closing process. Insert an X in the space providedif the account is not closed._____17. Net Summary ( Assume Net loss)____18.Cash____24.Interest Expense____19.Rent Expense____25.Unearned Subscription Revenue____20.Depreciation Expense____21.Equipment____22Owner’s Drawing____23.Accounts Receivable
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