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College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E

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choose the correct letter of answer

Entity A’s income statement shows a line item described as “Cost of goods sold.” Entity A is most likely a
A. service business.
B. merchandising business.
C. sole proprietorship business.
D. partnership business.

Which of the following accounts is increased by a credit?
A. Cash
B. Accounts receivable
C. Accounts payable
D. Owner’s drawings

At the beginning of the period, the owner’s capital account of a business has a balance of ₱220,000. During the period, the total debits and credits to that account were ₱60,000 and ₱70,000, respectively. How much is the ending balance of the owner’s capital account?

A. 230,000
B. 210,000
C. 350,000
D. 90,000

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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