Unit Review Sheets
Chapter 7/Unit 14
Review Sheet 14/Merchandising Accounts
Answer or complete the following.
K, C
K, C, A
1. (a)
(b)
(c)
(d)
Name three types of business: ___________________________________________________.
Goods bought for resale are called__________________________.
The value of all merchandise on hand is recorded in the_________________________account.
Merchandise purchased for resale is recorded in the_______________________account on the
_____________________________ side.
(e) To record merchandise purchased on account, debit____________and credit_______________.
(f) The cost of transporting merchandise from the supplier to the buyer’s place of business is
recorded in the _________________________________________________________account.
(g) The cost of delivering merchandise to customers is recorded in the________________account.
(h) A special account used to record goods returned by customers or allowances on the price of
defective goods is called the_______________________________________________account.
(i) To record a cash refund to a customer for goods returned, debit_________________________
and credit ____________.
(j) When goods that were originally sold on account are returned by a customer, debit
__________________________ and credit ______________________________.
(k) A cash refund for merchandise returned to a creditor is recorded by debiting _______________
and crediting_____________________________________.
(l) A credit invoice received for goods bought on account and returned to the creditor is recorded
by debiting______________________and crediting __________________________________.
(m)The source document that records goods returned is the_______________________________.
2. What account is debited for each of the following items purchased by a sporting goods store?
(a) a cash register_________________________________________________________________
(b) 20 pairs of skates ______________________________________________________________
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(c)
(d)
(e)
(f)
K, C
gas and oil for the delivery truck__________________________________________________
1 gross tennis balls_____________________________________________________________
5000 blank sales invoice forms for the accountant’s use________________________________
signs for a special sale __________________________________________________________
3. Complete the following. Where appropriate, indicate your response with an underline.
(a) The income statement for a merchandising company has three sections: Revenue,___________
______________________, and Expenses.
(b) The Sales Returns and Allowances account goes in the ________________________________
section of the income statement.
(c) Sales − Sales Returns and Allowances = ___________________________________________.
(d) Purchases − Purchases Returns and Allowances = ___________________________________.
(e) Transportation on Purchases increases/decreases the cost of merchandise purchased.
(f) The cost of goods sold is determined by completion of the_____________________________
__________________________________________.
(g) Merchandise Inventory appears in the_______________________ section of the balance sheet.
(h) An actual count of all merchandise on hand is_______________________________________.
4. (a) If sales are $80 000 and sales returns and allowances are $1200, then net sales are $ ________.
(b) Sales are $30 000, Cost of Goods Sold is $18 000, and Expenses are $8000.
What is the gross profit?
$______________
What is the net income/net loss?
$______________
(c) Determine the cost of goods sold for each of the following.
(1) Jan. 1 Inventory $15 000; Purchases $10 000; Jan. 31 Inventory $13 000.
Cost of goods sold = $____________________
K, C, A
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(2) Jan. 1 Inventory $80 000; Purchases $100 000; Purchases Returns and Allowances
$8000; Jan. 31 Inventory $60 000.
Cost of goods sold = $____________________
(3) May 1 Inventory $30 000; Purchases $20 000; Purchases Returns and Allowances $1000;
Transportation on Purchases $2000; May 31 Inventory $33 000.
Cost of goods sold = $____________________
K, C, A
5. Use the following account totals to determine the net income or net loss for June: Sales
$120 000; Sales Returns and Allowances $2500; June 1 Merchandise Inventory $120 000;
Purchases $70 000; Purchases Returns and Allowances $2900; Transportation on Purchases
$4000; June 30 Merchandise Inventory $100 000; Selling Expenses $20 000; Office
Expenses $15 000.
Net Income/Net Loss (Underline whichever is correct.) = $______________
K, C, A
6. Explain the difference between the periodic and perpetual inventory methods. In your answer
include the accounts used in each system.
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
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K, C, A
7. Prepare journal entries (journal page 94) for the following transactions for a company that uses
the perpetual inventory method. Use the journal provided on p.5.
Jul. 10
11
15
17
31
Purchase invoices received:
No. M179 from Acme Wholesale for $2000 in merchandise, dated July 5, terms net 30.
No. 859 from Speedy Delivery, $200 for charges related to the purchase of
merchandise, net 30, invoice date July 2.
No. 1118 from Northern Inc. for $1500, dated July 7, for merchandise, terms net 10.
Sold goods for $300 cash. The cost of the goods was $200.
Credit Invoice C-420 received from Acme Wholesale for $300 of damaged goods
returned to Acme.
Issued Cheque 333 for $1500 to Northern Inc. to pay invoice dated July 7.
Issued Cheque 334 for $1700 in payment of July 5 invoice.
Chapter 7/Unit 15
K, C, A
Review Sheet 15 /Provincial Sales Tax
and Goods and Services Tax
1. Calculate the PST, the GST, and the total for each of the following sales. Use your province’s
PST rate.
Sale
$115.00
$865.00
$49.95
$1281.87
GST
PST
Total Sale
K, C, A
2. Prepare general journal entries in the space that follows to record the following source documents:
(a) Cash Sales Slip 1059 for $54. PST exempt. GST $3.78. Total $57.78.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(b) Cash register tape totalling $3500 plus PST of $280 and GST of $245.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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(c) Purchase Invoice S-21397 for $535 for merchandise of $500 and GST of $35. Terms 2/10,
net 30.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(d) Paid invoice described in (c), less 2 percent discount, Cheque 281.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(e) Purchase Invoice L-4442 for office supplies, $150 plus GST, terms net 30.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(f) Sales Invoice B-8956 issued to J. Bentley for $34.50 plus 7 percent GST and 8 percent PST.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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(g) Cheque 219 issued to the provincial treasurer for $2100 in PST collected in July. No
commission is involved.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(h) Issued Cheque 220 to the federal government for GST collected in July. The balances in the
GST Refundable and GST Payable accounts are $395 and $700 respectively.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(i) Sales Invoice B-8957 for $150 issued to J. Gervais plus 7 percent GST and 8 percent PST.
Terms 2/10, net 30.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(j) Received a cheque from J. Gervais for full amount of the invoice described in (i), less the
2 percent discount.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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(m)Refunded cash to a customer for goods returned. The original sale was $74 plus PST of $5.92
and GST of $5.18.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Chapter 12/Unit 27 Review Sheet 27/Adjusting the Books
1. (a) A business that sells merchandise is called a(n) ______________________________company.
(b) When adjusting for bad debts, the account debited is _____________________and the account
K, C
credited is _____________________________________.
(c) The two methods used to estimate the amount of bad debts are __________________________
____________________________________________________________________________.
(d) The _______________________ method takes into consideration a prior balance in Allowance
for Doubtful Accounts.
(e) (1) On which financial statement does Bad Debts Expense appear?_______________________
(2) On which statement does Allowance for Doubtful Accounts appear?__________________
(f) A list of accounts receivable that shows the balance and the length of time the balance has
been owed is called ___________________________________________________________.
K, C, A
2. The estimated bad debts of a company, as indicated by the age analysis, are $540. There is a
credit balance of $27 in Allowance for Doubtful Accounts. Use the balance sheet method to
calculate the amount of the adjustment for bad debts.
_______________________________________________________________________________
K, C, A
3. The estimated bad debts of a company, as indicated by the age analysis, is $1820. There is a
debit balance of $60 in the Allowance for Doubtful Accounts. What amount is required to adjust
bad debts?
_______________________________________________________________________________
K, C, A
4. A company has net sales of $180 000. Bad debts are estimated to be 1 percent of net sales. What
is the estimate in dollars?_____________________________________________
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K, C, A
5. A company has a balance of $220 000 in its Sales account and $14 000 in Sales Returns. Its bad
debts are estimated to be 2 percent of net sales. What is the estimate in dollars?________________
K, C, A
6. (a) For question 10, the account and amount debited in the adjusting entry are:
____________________________________________________________________________
(b) The credit is __________________________________________________________________
K, C, A
7. On which financial statement does each of the following accounts appear?
(a) Bad Debts Expense____________________________________________________________
(b) Accounts Receivable ___________________________________________________________
(c) Allowance for Doubtful Accounts_________________________________________________
K, C, A
8. What accounts are debited and credited when a customer’s debit is uncollectible?
Debit: ______________________________
K, C, A
Credit:_____________________________________
9. Prepare general journal entries for the following:
(a) Interest at 10.9 percent is owed on a bank loan for one year. The amount of the loan
is $12 000.
(b) Salaries are owed to employees for commissions earned on sales of $220 000. The rate of
commission is 3 percent.
(c) Revenue earned but not recorded is $2000.
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Chapter 12/Unit 28 Review Sheet 28/Adjustments and the Work Sheet
K, C
K, C, A
1. A work sheet helps to organize the data required to prepare _______________________________.
2. Underline the responses that correctly complete the following statements and fill in any blanks.
(a) A work sheet has a credit total of $90 000 in the income statement section, and a debit total
of $85 000.
This means there is a net income/net loss of $ _____________.
(b) A work sheet has a debit total of $120 000 in the balance sheet section and a credit total
of $115 000.
This means there is a net income/net loss of $ _____________.
(c) The work sheet for Fraser Enterprises reproduced at the end of this review sheet shows a net
income (and not a loss) because __________________________________________________
____________________________________________________________________________.
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K, C
3. The four sections of an eight-column work sheet are identified as follows:
______________________________________
_______________________________________
______________________________________
K, C
4. The main difference between the ten- and the eight-column work sheet is ____________________
_______________________________________________________________________________.
K, C
5. The mathematical accuracy of the adjustments section of the work sheet is proved by __________
_______________________________________________________________________________
_______________________________________________________________________________.
K, C
6. After the adjustments have been completed and the columns totalled, the items on the trial
balance are transferred to either the income statement or the balance sheet sections of the
work sheet.
_____________________________________and________________________________________
are transferred to the income statement section.
_______________________________________, ______________________________________,
and ______________________________are transferred to the balance sheet section.
K, C
7. List the four steps involved in preparing the work sheet.
(1) ____________________________________________________________________________
(2) ____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(3) ____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(4) ____________________________________________________________________________
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K, C, A
8. The January 1 inventory for L. Vignault Co. is $49 000. The ending inventory (December 31) is
$36 200. Explain how these figures are recorded on the work sheet.
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
K, C, A
Refer to the Fraser Enterprises work sheet, reproduced at the end of this review sheet, in order to
complete the questions that follow.
9. (a) How much is the adjustment to Allowance for Doubtful Accounts? $_______________
(b) Identify the new balances in Bad Debts Expense: $___________________
and in Allowance for Doubtful Accounts: $___________________
(c) Into which columns of the work sheet are these new balances extended?__________________
____________________________________________________________________________
10. (a) How much is Supplies Expense for the year? $_____________________
(b) What is the new balance in the asset Supplies? $__________________
11. (a) How much is Depreciation Expense—Building? $_________________
(b) Identify the new balances, after adjustments, for Accumulated Depreciation—Building:
$___________________ and Accumulated Depreciation—Equipment: $__________________.
12. (a) How much is the Interest Expense? $______________________
(b) To which column is the Interest Payable amount transferred?___________________________
13. (a) How much is the ending merchandise inventory? $___________________
(b) In which columns is it recorded?__________________________________________________
14. (a) How much is the January 1 inventory? $____________________
(b) Into which column is this amount transferred?_______________________________________
15. What is the total of Salaries Expense? $___________________
16. Into which column is the Drawings amount transferred?__________________________________
17. (a) How much is the net income? $___________________
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(b) To which income statement column is the net income added?___________________________
(c) To which balance sheet column is the net income added?______________________________
18. (a) How many expenses are there?___________________
(b)
(c)
(d)
(e)
(f)
(g)
(h)
How many liabilities?____________________
How many revenue accounts?___________________
How many contra assets?__________________
How many current assets?___________________
How many fixed assets?__________________
How many current liabilities?____________________
How many fixed or long-term liabilities?____________________
19. What is the length of the accounting period covered by this work sheet?______________________
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Chapter 12/Unit 29 Review Sheet 29/Financial Statements
K, C, A
1. Use the short forms CA (Current Assets), FA (Fixed Assets), CL (Current Liabilities), LTL
(Long-Term Liabilities), and E (Equity) to indicate the section of the classified balance sheet on
which each of the following accounts appear.
(a)
(b)
(c)
(d)
(e)
(f)
Cash
Allowance for Doubtful Accounts
Six-month bank loan
Accounts Payable
Equipment
Owner’s Capital
__________
__________
__________
__________
__________
__________
(g)_Supplies
(h)_Merchandise Inventory
(i) Building
(j) Accumulated Dep.—Bldg.
(k)_Owner’s Drawings
___________
___________
___________
___________
___________
2. Name the three sections of the classified income statement: (1)_____________________________
(2) __________________________________
(3) _____________________________________
3. (a) What purpose is served by classifying financial statements?
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(b) Explain the need for the following accounting procedures.
adjusting entries:______________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
closing entries:________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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K, C, A
reversing entries:______________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(c) What is the last step in the accounting cycle?
____________________________________________________________________________
(d) Which accounts are closed?
____________________________________________________________________________
____________________________________________________________________________
(e) Which accounts appear on the post-closing trial balance?
____________________________________________________________________________
____________________________________________________________________________
(f) Name one adjusting entry that requires a reversing entry.
____________________________________________________________________________
4. Into which account is the net income or net loss closed?__________________________________
5. A revenue account is closed by debiting ___________________________________________ and
crediting ___________________________________________.
6. An expense account is closed by debiting __________________________________________ and
crediting ___________________________________________.
7. After posting the closing entries, the only general ledger accounts with balances are:
_______________________________________________________________________________
_______________________________________________________________________________
8. After posting adjusting and closing entries, the mathematical accuracy of the general ledger is
proved by ______________________________________________________________________.
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