1. On January 1 2010 Leardon Inc. purchased equipment for $45000. The company is depreciating the equipment at the rate of $600
per month. At January 312011 the balance in Accumulated Depreciation is:

a. $600 debit

b. $7200 credit

c. $7800 credit

d. $39900 debit

2. The final step in the accounting cycle is to prepare:

a. Closing entries

b. Financial statements

c. A post closing trial balance

d. Adjusting entries

3. Gross profit equals the difference between

a. Net income and operating expenses

b. Net sales revenues and cost of goods sold

c. Net sales revenue and operating expenses

d. Net sales revenues and cost of goods sold plus operating expenses

4. An adjusting entry would not include which of the following accounts?

a. Cash

b. Interest receivable

c. Property tax payable

d. Unearned revenue