1. On January 1, 2010, Leardon Inc. purchased equipment for $45,000. The company

Question

1.       On January 1, 2010, Leardon Inc. purchased equipment for $45,000. The company is depreciating the equipment at the rate of $600 per month. At January 31,2011, the balance in Accumulated Depreciation is:

a.       $600 debit

b.      $7,200 credit

c.       $7,800 credit

d.      $39,900 debit

2.       The final step in the accounting cycle is to prepare:

a.       Closing entries

b.      Financial statements

c.       A post closing trial balance

d.      Adjusting entries

3.       Gross profit equals the difference between

a.       Net income and operating expenses

b.      Net sales revenues and cost of goods sold

c.       Net sales revenue and operating expenses

d.      Net sales revenues and cost of goods sold plus operating expenses

4.       An adjusting entry would not include which of the following accounts?

a.       Cash

b.      Interest receivable

c.       Property tax payable

d.      Unearned revenue

Explanation / Answer

1)

b. $7,200 credit

2)

c. A post closing trial balance

3)

d. Net sales revenues and cost of goods sold plus operating expenses

4)

a. Cash

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