Multiple choice questions.
1. BRN Corporation has two divisions: California and Nevada. Both divisions have the same basic chart of accounts, which numbers current assets in the 100s, plant assets in the 200s, and so on. BRN differentiates them with an appended “C” or “N” after the account number. From BRN’s point of view, the chart of accounts coding system would best be described as:
a. Block.
b. Hierarchical.
c. Mnemonic.
d. Sequential.
2. Consider the data from Question 1. From the divisions’ point of view, the chart of accounts coding system would best be described as:
a. Block.
b. Hierarchical.
c. Mnemonic.
d. Sequential.
3. Which of the following is a characteristic of all adjusting entries?
a. They are written in the journal, but not posted to the ledger.
b. They always involve an entry to Cash or Retained Earnings.
c. They always include one nominal account and one permanent account.
d. They always involve estimates.
4. Consider the trial balance of DMN Corporation shown in Table 2.1. Based on that trial balance alone, which of the following income statement items would total $7,500?
a. Revenue
b. Gross profit
c. Net income
d. Net loss
5. Consider the trial balance of DMN Corporation shown in Table 2.1. Based on that trial balance alone, DMN’s income statement would report:
a. Net income of $7,500.
b. Net loss of $7,500.
c. Net income of $1,300.
d. Net loss of $1,300.