Question 1

Adjusting entries are necessary so that asset, liability, revenue, and expense account
balances are correctly recorded.
True
False
Question 2
A company has inventory of 10 units at a cost of $10 each on June 1. On June 3, it
purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO
perpetual inventory method, what is the cost of the 12 units that were sold?
$128
$124
$120
$130
5 points
Question 3
An adjusting entry could be made for each of the following EXCEPT:
Prepaid expenses
Depreciation
Owner withdrawals
Unearned revenues
Question 4
Which of the following is responsible for the internal controls and ethics policies of
a company:
Internal Auditors
External Auditors
Management
Employees that have been with the company for over 10 years
Question 5
The closing process is necessary in order to:
Calculate net income or net loss for an accounting period.
Ensure that all permanent accounts are closed to zero at the end of each accounting
period.

Ensure that the company complies with state laws.

Ensure that net income or net loss and owner withdrawals for the period are
closed into the owner's capital account.