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Japan Chamber of Commerce Bookkeeping Grade 3 | Closing Adjustments and Financial Statements 01

1 / 100.0s

Problem 1 ・ Question 1 / 10

Opening inventory is 100,000 yen, purchases for the period are 600,000 yen and closing inventory is 150,000 yen. What is the cost of sales?

View explanation

100,000 + 600,000 − 150,000 = 550,000 yen.

Problem 1 ・ Question 2 / 10

At the closing date 8,000 yen of postage stamps remain unused. Which account is credited to transfer them to stores?

View explanation

The unused portion is transferred to the asset Stores, reducing Communication expenses on the credit side.

Problem 1 ・ Question 3 / 10

Insurance of 12,000 yen relating to the following period is included in the insurance expense of the current period. Which account is debited in the closing adjustment?

View explanation

The amount relating to the following period is taken out of current expenses and treated as the asset Prepaid insurance.

Problem 1 ・ Question 4 / 10

Rent of 20,000 yen relating to the current period is unpaid. Which account is credited in the closing adjustment?

View explanation

The current-period expense is debited and the unpaid amount treated as the liability Accrued rent.

Problem 1 ・ Question 5 / 10

Interest income of 5,000 yen relating to the current period has not been received. Which account is debited in the closing adjustment?

View explanation

Revenue already earned in the period but not yet received is recorded as the asset Interest receivable.

Problem 1 ・ Question 6 / 10

Doubtful accounts are estimated at 2% of the closing accounts receivable balance of 200,000 yen, and the allowance has a nil balance. What is the charge to the allowance for doubtful accounts?

View explanation

200,000 yen × 2% = 4,000 yen.

Problem 1 ・ Question 7 / 10

After the closing adjustments, to which account are the balances of the revenue and expense accounts transferred?

View explanation

Revenues and expenses are transferred to the profit and loss account to arrive at the profit or loss for the period.

Problem 1 ・ Question 8 / 10

Which financial statement shows the assets, liabilities and net assets at a point in time?

View explanation

The balance sheet shows the financial position as at the closing date.

Problem 1 ・ Question 9 / 10

Which financial statement shows the results of operations from the revenues and expenses of a period?

View explanation

The profit and loss statement shows the revenues, expenses and profit of the accounting period.

Problem 1 ・ Question 10 / 10

Sales are 900,000 yen, cost of sales 550,000 yen and selling, general and administrative expenses 250,000 yen. What is the operating profit?

View explanation

900,000 − 550,000 − 250,000 = 100,000 yen.