QUESTION 4 (30 POINTS Answer the following questions 1. A credit to an asset acc

Question

QUESTION 4 (30 POINTS Answer the following questions 1. A credit to an asset accounts indicates a. An error b. A credit was made to a liability account c. An increase in the asset d. A decrease in the asset 2. Gross Profit does appear a. On a balance sheet b. On a single step income statement c. On a multiple step income statement d. On the income statement if company has no property on its books 3. Unearned revenue is classified as a. A liability b. A revenue account c. A contra-asset account d. An asset account Suppose Rose Travel had sales of $ 5,600,000 and sales returns of $ 95,000. Cost of goods sold was $ 2,000,000. How much gross profit did Rose have? a. $2,000,000 b. $5,504,000 c. $5,600,000 d. $3,505,000 4. Which type of business organization is owned by only one owner? a. Corporation b. Sole Proprietorship c. Partnership d. Items a, b, and c are all correct 5. What do closing entries accomplish? a. Bring the Capital account to its correct ending balance b. Zero out the revenues, withdrawals, and expenses c. Transfers revenues, expenses, and withdrawals to the Capital account d. All of the above 6.

Explanation / Answer

Answer:

1.d.decrease in asset.Assets have debit balance anad any credit will decrease the same.

2.c.on multistep income statement

3.a.A liability

4.d.$ 3505000 . $5600000 - $ 95000 = 5505000 (net sales) - $ 2000000 (cost of goods sold ) = $ 3505000 (gross profit)

5.b.Sole Proprietorship

6.d.All of the above

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