Question

8. The adjustment for depreciation expense was omitted, this would: A) overstate the period's expenses and overstate the period end liabilities. B) overstate the period's expenses and understate the period end liabilities. C) understate the period's expenses and overstate the period's assets. D) understate the period's expenses and understate the period's assets. 9. The income statement columns on a worksheet have subtotals as follows: debit column, $12,000, and credit column, $9,000. This indicates that: A) the company incurred a net loss of $3,000. B) the company carned a net income of $1,500. C) there was an error in the unadjusted trial balance columns. D) there was an error in the income statement columns. 10. Owner's Withdrawals would be found on the worksheet in the: A) income statement debit column. B) income statement credit column. C) balance sheet debit column. D) balance sheet credit column. 11. Which of the following is NOT an operating expense? A) Payroll Tax Expense B) Freight-in Supplies Expense D) Depreciation Expense - Office Equipment 12. The information to prepare the Statement of Owner's Equity comes from the A) income statement columns on the worksheet. B) adjustments columns on the worksheet. C) balance sheet columns on the worksheet. D) general ledger 13. Liquidity is: A) how quickly loans can be paid. (B) how easily an asset can be converted to cash. C) how much cash a company has on its balance sheet. D) how quickly customers pay. 14. The ending merchandise inventory was understated. This error would cause: A) net income to be understated. B) assets to be overstated. C) net income to be overstated. D) None of these is correct. 15. To determine how much merchandise a company has returned to its vendors, it should review the: A) Purchases Returns & Allowances account. B) Change in the Inventory balance. C) Sales Returns & Allowances account. D) Sales Discounts account

Answer 1

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