1. A partnership is owned by two or more individuals.

   True

   False

2. The basic financial statements include the:

   a.trial balance.

   b.bank reconciliation statement.

   c.ledger account.

   d.balance sheet.

3. The unearned rent account has a balance of $57,617. If $3,930 of the $57,617 is unearned at the end of the accounting period, find the amount of the adjusting entry.

   Select the correct answer.

   a.$3,930

   b.$53,687

   c.$61,547

   d.$57,617

4. Which of the following statements is true?

   a.The revenue activities of a retail business involve the building of a product.

   b.The revenue activities of a service business involve providing services to customers.

   c.The revenue activities of a retail business involve providing services to customers.

   d.The revenue activities of a service business involve the building of a product.

5. The difference between sales and cost of goods sold for a retail business is:

   a.gross profit.

   b.gross sales.

   c.net sales.

   d.sales.

6. Surist, Inc. purchased merchandise for $300,000, received credit for purchase returns of $20,000, availed purchase discounts of $5,000, and paid transportation in of $12,000. Refer to Surist, Inc. If Surist, Inc. had $30,000 in beginning inventory, and sold goods costing $180,000, what is the ending inventory balance?

   a.$137,000

   b.$150,000

   c.$90,000

   d.$162,000

7. Merchandise purchased on account by a company has no effect on its working capital because:

   a.inventory and accounts payable are increased by the same amount.

   b.cash and inventory are increased by the same amount.

   c.inventory and accounts receivable are increased by the same amount.

   d.cash and inventory are decreased by the same amount.