3. In a single proprietorship, what does the proprietor's account represent?
4. Name one good reason why withdrawals of the proprietor should be charged to a personal account.
5. When the books are closed, what account absorbs the profit or loss?
6. What is meant by taking an inventory, and what processes are involved?
7. Should an inventory be based on cost or on selling prices? Why?
8. What is meant by closing the books?
9. In a retail business, such as is discussed in the text, what regular accounts are closed into trading account?
10. What does the balance of trading account represent? Into what account is this balance closed?
11. What does the difference between assets and liabilities, as shown by the balance sheet, represent? In a single proprietorship, with what ledger account does this balance agree?
12. George Thompson commences business to-day, with assets consisting of cash, $1,650.00; an account due from Henry Watson, $84.60. His transactions consist of purchases on account as follows: