Q. Which of the following accounts normally have a credit balance?
Unearned revenues; Prepaid rent; Revenues.
Revenues; Expenses; Retained earnings.
Revenues; Cash; Unearned revenue.
Accounts payable; Retained earnings; Revenues.
Q. Which of the following best describes the difference between an unadjusted trial balance and an adjusted trial balance?
An unadjusted trial balance is prepared at the start of the accounting period and is not provided to external decision makers, while an adjusted trial balance is prepared at the end of the period and is provided to external decision makers.
An unadjusted trial balance is prepared by companies that make adjusting entries, while an adjusted trial balance is prepared by companies that do not make adjusting entries.
An unadjusted trial balance is prepared before the adjusting entries have been made, while an adjusted trial balance is prepared after the adjusting entries have been made.
An unadjusted trial balance is prepared after the post-closing trial balance.
Q. Which of the following is not reported as an operating expense on the income statement?
Administrative expenses.
Research and development expense.
Interest expense.
Selling expenses.
Q. Which of the following statements is false when a company sells inventory costing $700 for $1,200?
Cost of goods sold is $700.
Gross profit is $500.
Stockholders' equity changes.
Net sales increases $500.