Question

In: Accounting

1. When the balance in the Income Summary account is a​ debit, the company​ has: A.incurred...

1. When the balance in the Income Summary account is a​ debit, the company​ has:

A.incurred a net income.

B.made an error in their closing entries.

C.incurred a net loss.

D. had more revenue than expenses.

2. The amount for​ withdrawals, to be used on the Statement of​ Owner's Equity, would be obtained​ from:

A.the worksheet in the income statement credit column.

B.the worksheet in the balance sheet credit column.

C.the worksheet in the balance sheet debit column.

D.the worksheet in the income statement debit column.

3. Which of the financial statements is prepared last from the​ worksheet?

A.Statement of​ Owner's Equity

B.Balance Sheet

C.Income Statement

D.None of these answers are correct.

4. A petty cash fund is set​ up:

A.for the owner to withdraw money for personal use conveniently.

B.to pay for small expenses.

C.to pay for office supplies only.

D.to pay for business meeting expenses only.

Solutions

Expert Solution

Q.1 C.incurred a net loss.

Reason - When we transfer income and expenses into income summary account through revenue transfer income summary account gets credited, then we transferred expenses income summary accounts gets debited hence if we have debit balance in the income summary account it is clear that income summary account has more debit balance than credit hence it is determined to be loss

Q.2 C.the worksheet in the balance sheet debit column.

Reason - In the equity all the items has credit balance becuase of all are laibilities for the copany and withdrawals are the money which are debited from those account hence it is recorded on the debit side

Q3 B. Balance Sheet -

Reason - All the financial statements shows the transactions happened in that perticular financial year and that amount will not get carry forward to next years financial statement hence at the end of the year company makes balance sheet. as it shows the year end of the yea and in the worksheet.

Q.4 B.to pay for small expenses.

Reason - Petty cash fund are set up by the company to pay small small expenses.

ekkarill92 answered 2 years ago
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