1. Prepaid interest given in the adjusted trial balance will be treated as a (an)?

A) Asset
B) Liability
C) Revenue
D) Deferred expense



2. If the Gross profit is Rs. 5,000 and the net profit is 25% of the Gross profit. The expenses must be?

A) Rs. 3,750
B) Rs. 1,250
C) Rs. 4,150
D) Rs. 6,250



3. Which of the following is the largest single expense of most merchandising firms?

A) Cost of goods sold
B) Rent Expense
C) Amortization Expense
D) Salaries Expense



4. How is the balance sheet linked to the other financial statements?

A) The beginning retained earnings balance on the statement of retained earnings becomes the amount of retained earnings reported on the balance sheet
B) Retained earnings is added to total assets and reported on the balance sheet
C) Net income increases retained earnings on the statement of retained earnings, which ultimately increases retained earnings on the balance sheet
D) There is no link between the balance sheet and the other statements



5. The primary source of revenue for a wholesaler is?

A) Investment income
B) Service fees
C) The sale of merchandise
D) The sale of fixed assets the company owns