Question 1

On a classified balance sheet of a Canadian company, current assets are customarily listed

Accepted Answer

A)  in alphabetical order. 
B)  with the largest dollar amounts first. 
C)  in the order of liquidity. 
D)  in the order of acquisition. 
A)  in alphabetical order. 
B)  with the largest dollar amounts first. 
C)  in the order of liquidity. 
D)  in the order of acquisition. C

Question 2

The purpose of the post-closing trial balance is to

Accepted Answer

A)  ensure that all adjusting entries were made. 
B)  prove the equality of the balance sheet account balances that are carried forward into the next accounting period. 
C)  prove the equality of the income statement account balances that are carried forward into the next accounting period. 
D)  list all the balance sheet accounts in alphabetical order for easy reference. 
A)  ensure that all adjusting entries were made. 
B)  prove the equality of the balance sheet account balances that are carried forward into the next accounting period. 
C)  prove the equality of the income statement account balances that are carried forward into the next accounting period. 
D)  list all the balance sheet accounts in alphabetical order for easy reference. B

Question 3

The balance of the Depreciation Expense account will appear in the income statement debit column of a work sheet.

Accepted Answer

A) True 
 B)False  True

Question 4

IFRS uses the alternate statement name of "Statement of Financial Position" in the written standards, whereas ASPE uses the name "Balance Sheet".

Accepted Answer

A) True 
 B)False

Question 5

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 6

Reversing entries are used to reverse adjusting entries originally recorded to account for the lapse of prepaid expenses.

Accepted Answer

A) True 
 B)False

Question 7

Correcting entries are made any time an error is discovered even though it may NOT be at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Question 8

Closing entries are journalized after adjusting entries have been journalized.

Accepted Answer

A) True 
 B)False

Question 9

Sassy Hair Products has current assets of $26,000 and current liabilities of $16,500. Its current ratio is 0.6 to 1.

Accepted Answer

A) True 
 B)False

Question 10

If a work sheet is used, financial statements can be prepared before adjusting entries are journalized.

Accepted Answer

A) True 
 B)False

Question 11

Queenstown Marina noticed an error in their financial statements after the financial statements had been submitted to their bank. The company is applying for a new loan to install a new wharf. The controller of Queenstown should

Accepted Answer

A)  wait until the bank has approved the loan to notify them of the mistake. 
B)  inform Queenstown's management and assume that they will tell the bank. 
C)  inform Queenstown's management and inform the bank and provide corrected financial statements. 
D)  do nothing or resign. 
A)  wait until the bank has approved the loan to notify them of the mistake. 
B)  inform Queenstown's management and assume that they will tell the bank. 
C)  inform Queenstown's management and inform the bank and provide corrected financial statements. 
D)  do nothing or resign.

Question 12

Closing entries are necessary if the business plans to continue operating in the future and issue financial statements each year.

Accepted Answer

A) True 
 B)False

Question 13

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 14

Cash is a temporary account and it should be zero after all closing entries have been posted.

Accepted Answer

A) True 
 B)False

Question 15

On January 1, Robert Auto Repair Shop purchased parts on account for $800. Robert paid the entire balance on January 31 and recorded the payment by debiting Supplies for $800 and crediting Cash for $800. On the January 31 financial statements

Accepted Answer

A)  assets and expenses will be understated. 
B)  assets and liabilities will be overstated. 
C)  expenses and liabilities will be overstated. 
D)  assets and liabilities will be understated. 
A)  assets and expenses will be understated. 
B)  assets and liabilities will be overstated. 
C)  expenses and liabilities will be overstated. 
D)  assets and liabilities will be understated.

Question 16

A reversing entry is made at the beginning of the next accounting period and is the exact opposite of the adjusting entry that was made in the previous period.

Accepted Answer

A) True 
 B)False

Question 17

Closing entries are journalized and posted

Accepted Answer

A)  before the financial statements are prepared. 
B)  after the financial statements are prepared. 
C)  when the business is closing its doors. 
D)  at the end of each interim accounting period. 
A)  before the financial statements are prepared. 
B)  after the financial statements are prepared. 
C)  when the business is closing its doors. 
D)  at the end of each interim accounting period.

Question 18

The difference between current assets and current liabilities is called working capital.

Accepted Answer

A) True 
 B)False

Question 19

Correcting entries will only be done at the same time as the adjusting entries are being prepared.

Accepted Answer

A) True 
 B)False

Question 20

Important information needed to determine if companies can pay their current obligations is the

Accepted Answer

A)  profit for this year. 
B)  projected profit for next year. 
C)  relationship between current assets and current liabilities. 
D)  relationship between current and non-current liabilities. 
A)  profit for this year. 
B)  projected profit for next year. 
C)  relationship between current assets and current liabilities. 
D)  relationship between current and non-current liabilities.

On a classified balance sheet of a Canadian company, current assets are customarily listed

The purpose of the post-closing trial balance is to

The balance of the Depreciation Expense account will appear in the income statement debit column of a work sheet.

IFRS uses the alternate statement name of "Statement of Financial Position" in the written standards, whereas ASPE uses the name "Balance Sheet".

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

Reversing entries are used to reverse adjusting entries originally recorded to account for the lapse of prepaid expenses.

Correcting entries are made any time an error is discovered even though it may NOT be at the end of an accounting period.

Closing entries are journalized after adjusting entries have been journalized.

Sassy Hair Products has current assets of $26,000 and current liabilities of $16,500. Its current ratio is 0.6 to 1.

If a work sheet is used, financial statements can be prepared before adjusting entries are journalized.

Queenstown Marina noticed an error in their financial statements after the financial statements had been submitted to their bank. The company is applying for a new loan to install a new wharf. The controller of Queenstown should

Closing entries are necessary if the business plans to continue operating in the future and issue financial statements each year.

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Cash is a temporary account and it should be zero after all closing entries have been posted.

On January 1, Robert Auto Repair Shop purchased parts on account for $800. Robert paid the entire balance on January 31 and recorded the payment by debiting Supplies for $800 and crediting Cash for $800. On the January 31 financial statements

A reversing entry is made at the beginning of the next accounting period and is the exact opposite of the adjusting entry that was made in the previous period.

Closing entries are journalized and posted

The difference between current assets and current liabilities is called working capital.

Correcting entries will only be done at the same time as the adjusting entries are being prepared.

Important information needed to determine if companies can pay their current obligations is the

Accounting in Action

The Recording Process

Adjusting the Accounts

Inventory Costing

Internal Control and Cash

Accounting for Receivables

Long-Lived Assets

Current Liabilities and Payroll

Filters

Exam 4: Completion of the Accounting Cycle

On a classified balance sheet of a Canadian company, current assets are customarily listed

The purpose of the post-closing trial balance is to

The balance of the Depreciation Expense account will appear in the income statement debit column of a work sheet.

IFRS uses the alternate statement name of "Statement of Financial Position" in the written standards, whereas ASPE uses the name "Balance Sheet".

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

Reversing entries are used to reverse adjusting entries originally recorded to account for the lapse of prepaid expenses.

Correcting entries are made any time an error is discovered even though it may NOT be at the end of an accounting period.

Closing entries are journalized after adjusting entries have been journalized.

Sassy Hair Products has current assets of $26,000 and current liabilities of $16,500. Its current ratio is 0.6 to 1.

If a work sheet is used, financial statements can be prepared before adjusting entries are journalized.

Queenstown Marina noticed an error in their financial statements after the financial statements had been submitted to their bank. The company is applying for a new loan to install a new wharf. The controller of Queenstown should

Closing entries are necessary if the business plans to continue operating in the future and issue financial statements each year.

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Cash is a temporary account and it should be zero after all closing entries have been posted.

On January 1, Robert Auto Repair Shop purchased parts on account for $800. Robert paid the entire balance on January 31 and recorded the payment by debiting Supplies for $800 and crediting Cash for $800. On the January 31 financial statements

A reversing entry is made at the beginning of the next accounting period and is the exact opposite of the adjusting entry that was made in the previous period.

Closing entries are journalized and posted

The difference between current assets and current liabilities is called working capital.

Correcting entries will only be done at the same time as the adjusting entries are being prepared.

Important information needed to determine if companies can pay their current obligations is the

Accounting in Action

The Recording Process

Adjusting the Accounts

Inventory Costing

Internal Control and Cash

Accounting for Receivables

Long-Lived Assets

Current Liabilities and Payroll

Filters