Question 1

Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

In a corporation, Retained Earnings is a part of stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 3

The income statement for the year 2015 of Fugazi Co. contains the following information:   At January 1, 2015, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2015, the company will report retained earnings of

Accepted Answer

A) $17,500. 
B) $32,500. 
C) $40,000. 
D) $42,500. 
A) $17,500. 
B) $32,500. 
C) $40,000. 
D) $42,500.

Question 4

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information:   The entry to close Income Summary to Retained Earnings includes

Accepted Answer

A) a debit to Revenues for $7,000. 
B) credits to Expenses totalling $5,700. 
C) a credit to Income Summary for $1,300 
D) a credit to Retained Earnings for $1,300. 
A) a debit to Revenues for $7,000. 
B) credits to Expenses totalling $5,700. 
C) a credit to Income Summary for $1,300 
D) a credit to Retained Earnings for $1,300.

Question 5

The use of reversing entries

Accepted Answer

A) is a required step in the accounting cycle. 
B) changes the amounts reported in the financial statements. 
C) simplifies the recording of subsequent transactions. 
D) is required for all adjusting entries. 
A) is a required step in the accounting cycle. 
B) changes the amounts reported in the financial statements. 
C) simplifies the recording of subsequent transactions. 
D) is required for all adjusting entries.

Question 6

Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

Accepted Answer

A) True 
 B)False

Question 7

A double rule applied to accounts in the ledger during the closing process implies that

Accepted Answer

A) the account is a temporary account. 
B) the account is a balance sheet account. 
C) the account balance is not zero. 
D) a mistake has been made, since double ruling is prescribed. 
A) the account is a temporary account. 
B) the account is a balance sheet account. 
C) the account balance is not zero. 
D) a mistake has been made, since double ruling is prescribed.

Question 8

The heading for a post-closing trial balance has a date line that is similar to the one found on

Accepted Answer

A) a balance sheet. 
B) an income statement. 
C) a retained earnings statement. 
D) the worksheet. 
A) a balance sheet. 
B) an income statement. 
C) a retained earnings statement. 
D) the worksheet.

Question 9

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

Accepted Answer

A) True 
 B)False

Question 10

The subtotal net assets is used in

Accepted Answer

A) both GAAP and IFRS. 
B) GAAP but not IFRS. 
C) IFRS but not GAAP. 
D) neither IFRS nor GAAP. 
A) both GAAP and IFRS. 
B) GAAP but not IFRS. 
C) IFRS but not GAAP. 
D) neither IFRS nor GAAP.

Question 11

The following information is for Bright Eyes Auto Supplies:   The total dollar amount of assets to be classified as current assets is

Accepted Answer

A) $140,000. 
B) $220,000. 
C) $360,000. 
D) $500,000. 
A) $140,000. 
B) $220,000. 
C) $360,000. 
D) $500,000.

Question 12

The post-closing trial balance contains only

Accepted Answer

A) income statement accounts. 
B) balance sheet accounts. 
C) balance sheet and income statement accounts. 
D) income statement, balance sheet, and retained earnings statement accounts. 
A) income statement accounts. 
B) balance sheet accounts. 
C) balance sheet and income statement accounts. 
D) income statement, balance sheet, and retained earnings statement accounts.

Question 13

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

Accepted Answer

A) True 
 B)False

Question 14

Which statement about long-term investments is not true?

Accepted Answer

A) They will be held for more than one year. 
B) They are not currently used in the operation of the business. 
C) They include investments in stock of other companies and land held for future use. 
D) They can never include cash accounts. 
A) They will be held for more than one year. 
B) They are not currently used in the operation of the business. 
C) They include investments in stock of other companies and land held for future use. 
D) They can never include cash accounts.

Question 15

Current liabilities are obligations that the company is to pay within the coming year.

Accepted Answer

A) True 
 B)False

Question 16

The most efficient way to accomplish closing entries is to

Accepted Answer

A) credit the income summary account for each revenue account balance. 
B) debit the income summary account for each expense account balance. 
C) credit the dividends balance directly to the income summary account. 
D) credit the income summary account for total revenues and debit the income summary account for total expenses. 
A) credit the income summary account for each revenue account balance. 
B) debit the income summary account for each expense account balance. 
C) credit the dividends balance directly to the income summary account. 
D) credit the income summary account for total revenues and debit the income summary account for total expenses.

Question 17

If a company utilizes reversing entries, they will

Accepted Answer

A) be made at the beginning of the next accounting period. 
B) not actually be posted to the general ledger accounts. 
C) be made before the post-closing trial balance. 
D) be part of the adjusting entry process. 
A) be made at the beginning of the next accounting period. 
B) not actually be posted to the general ledger accounts. 
C) be made before the post-closing trial balance. 
D) be part of the adjusting entry process.

Question 18

The following information is for Bright Eyes Auto Supplies:   The total dollar amount of assets to be classified as property, plant, and equipment is

Accepted Answer

A) $390,000. 
B) $450,000. 
C) $570,000. 
D) $630,000. 
A) $390,000. 
B) $450,000. 
C) $570,000. 
D) $630,000.

Question 19

The income statement for the year 2015 of Fugazi Co. contains the following information:   After all closing entries have been posted, the revenue account will have a balance of

Accepted Answer

A) $0. 
B) $70,000 credit. 
C) $70,000 debit. 
D) $7,500 credit. 
A) $0. 
B) $70,000 credit. 
C) $70,000 debit. 
D) $7,500 credit.

Question 20

What is the order in which assets are generally listed on a classified balance sheet?

Accepted Answer

A) Current and long-term 
B) Current; property, plant, and equipment; long-term investments; intangible assets 
C) Current; property, plant, and equipment; intangible assets; long-term investments 
D) Current; long-term investments; property, plant, and equipment; intangible assets 
A) Current and long-term 
B) Current; property, plant, and equipment; long-term investments; intangible assets 
C) Current; property, plant, and equipment; intangible assets; long-term investments 
D) Current; long-term investments; property, plant, and equipment; intangible assets

Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

In a corporation, Retained Earnings is a part of stockholders' equity.

The income statement for the year 2015 of Fugazi Co. contains the following information: At January 1, 2015, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2015, the company will report retained earnings of

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes

The use of reversing entries

Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

A double rule applied to accounts in the ledger during the closing process implies that

The heading for a post-closing trial balance has a date line that is similar to the one found on

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

The subtotal net assets is used in

The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as current assets is

The post-closing trial balance contains only

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

Which statement about long-term investments is not true?

Current liabilities are obligations that the company is to pay within the coming year.

The most efficient way to accomplish closing entries is to

If a company utilizes reversing entries, they will

The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as property, plant, and equipment is

The income statement for the year 2015 of Fugazi Co. contains the following information: After all closing entries have been posted, the revenue account will have a balance of

What is the order in which assets are generally listed on a classified balance sheet?

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Completing the Accounting Cycle

Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

In a corporation, Retained Earnings is a part of stockholders' equity.

The income statement for the year 2015 of Fugazi Co. contains the following information: At January 1, 2015, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2015, the company will report retained earnings of

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes

The use of reversing entries

Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

A double rule applied to accounts in the ledger during the closing process implies that

The heading for a post-closing trial balance has a date line that is similar to the one found on

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

The subtotal net assets is used in

The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as current assets is

The post-closing trial balance contains only

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

Which statement about long-term investments is not true?

Current liabilities are obligations that the company is to pay within the coming year.

The most efficient way to accomplish closing entries is to

If a company utilizes reversing entries, they will

The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as property, plant, and equipment is

The income statement for the year 2015 of Fugazi Co. contains the following information: After all closing entries have been posted, the revenue account will have a balance of

What is the order in which assets are generally listed on a classified balance sheet?

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters