The accounts in the ledger of Monroe Entertainment Co. are listed below.  All accounts have normal balances. ​ Accounts Payable $1,500 Fees Earned $3,600 Accounts Receivable 1,800 Insurance Expense 1,300 Prepaid Insurance 2,000 Land 3,000 Cash 3,200 Wages Expense 1,400 Drawing 1,200 Capital 8,800 ​ Total assets are

The accounting equation can be expressed as Assets – Liabilities = Owner’s Equity.

Multiple Choice Questions (20 questions, 3 points each)

Prepare a multiple-step income statement for Armstrong Co. in proper form from the following data for the year ended December 31. Sales, $755,000; cost of merchandise sold, $330,000; administrative expenses, $35,000; interest expense, $30,000; rent revenue, $25,000; selling expenses, $50,000. ​Insert a 2 column table here and right justify the column with numbers. It will make it easier to prepare and to read.

The financial statements of a proprietorship should include the owner’s personal assets and liabilities.

Where are selling and administrative expenses found on the multiple-step income statement?

When an account payable is paid with cash, the owner’s equity in the business decreases.

Accounts are records of increases and decreases in individual financial statement items.

Prime costs consist of factory overhead and direct labor.

The following information is taken from the financial records of Gunner Manufacturing: ​ Cost of materials used  $ 45,000 Direct labor costs 48,000 Factory overhead 39,000 Work in process, beginning 18,000 Work in process, ending 28,000 ​ What is the cost of goods manufactured?