Question 1

A reversing entry

Accepted Answer

A)  reverses entries that were made in error. 
B)  is the exact opposite of an adjusting entry made in a previous period. 
C)  is made when a business disposes of an asset it previously purchased. 
D)  is made when a company sustains a loss in one period and reverses the effect with a profit in the next period. 
A)  reverses entries that were made in error. 
B)  is the exact opposite of an adjusting entry made in a previous period. 
C)  is made when a business disposes of an asset it previously purchased. 
D)  is made when a company sustains a loss in one period and reverses the effect with a profit in the next period.

Question 2

The income statement for the month of June, 2010 of Ramirez Enterprises contains the following information:   The entry to close Income Summary to Ramirez, Capital includes

Accepted Answer

A)  a debit to Revenue for $7,000. 
B)  credits to Expenses totalling $3,600. 
C)  a credit to Income Summary for $3,400 
D)  a credit to Ramirez, Capital for $3,400. 
A)  a debit to Revenue for $7,000. 
B)  credits to Expenses totalling $3,600. 
C)  a credit to Income Summary for $3,400 
D)  a credit to Ramirez, Capital for $3,400.

Question 3

A post-closing trial balance should be prepared

Accepted Answer

A)  before closing entries are posted to the ledger accounts. 
B)  after closing entries are posted to the ledger accounts. 
C)  before adjusting entries are posted to the ledger accounts. 
D)  only if an error in the accounts is detected. 
A)  before closing entries are posted to the ledger accounts. 
B)  after closing entries are posted to the ledger accounts. 
C)  before adjusting entries are posted to the ledger accounts. 
D)  only if an error in the accounts is detected.

Question 4

The operating cycle of a company is the average time that is required to go from cash to

Accepted Answer

A)  sales in producing revenues. 
B)  cash in producing revenues. 
C)  inventory in producing revenues. 
D)  accounts receivable in producing revenues. 
A)  sales in producing revenues. 
B)  cash in producing revenues. 
C)  inventory in producing revenues. 
D)  accounts receivable in producing revenues.

Question 5

Which of the following liabilities are not related to the operating cycle?

Accepted Answer

A)  Wages payable 
B)  Accounts payable 
C)  Utilities payable 
D)  Bonds payable 
A)  Wages payable 
B)  Accounts payable 
C)  Utilities payable 
D)  Bonds payable

Question 6

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 7

The two optional steps in the accounting cycle are preparing

Accepted Answer

A)  a post-closing trial balance and reversing entries. 
B)  a worksheet and post-closing trial balances. 
C)  reversing entries and a worksheet. 
D)  an adjusted trial balance and a post-closing trial balance. 
A)  a post-closing trial balance and reversing entries. 
B)  a worksheet and post-closing trial balances. 
C)  reversing entries and a worksheet. 
D)  an adjusted trial balance and a post-closing trial balance.

Question 8

The following information is for Benton Office Supplies:   The total dollar amount of liabilities to be classified as current liabilities is

Accepted Answer

A)  $70,000. 
B)  $60,000. 
C)  $150,000. 
D)  $160,000. 
A)  $70,000. 
B)  $60,000. 
C)  $150,000. 
D)  $160,000.

Question 9

Which of the following is an optional step in the accounting cycle?

Accepted Answer

A)  Adjusting entries 
B)  Closing entries 
C)  Correcting entries 
D)  Reversing entries 
A)  Adjusting entries 
B)  Closing entries 
C)  Correcting entries 
D)  Reversing entries

Question 10

In preparing closing entries

Accepted Answer

A)  each revenue account will be credited. 
B)  each expense account will be credited. 
C)  the owner's capital account will be debited if there is net income for the period. 
D)  the owner's drawing account will be debited. 
A)  each revenue account will be credited. 
B)  each expense account will be credited. 
C)  the owner's capital account will be debited if there is net income for the period. 
D)  the owner's drawing account will be debited.

Question 11

Which of the following would not be classified a long-term liability?

Accepted Answer

A)  Current maturities of long-term debt 
B)  Bonds payable 
C)  Mortgage payable 
D)  Lease liabilities 
A)  Current maturities of long-term debt 
B)  Bonds payable 
C)  Mortgage payable 
D)  Lease liabilities

Question 12

On a classified balance sheet, 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.

Question 13

Current liabilities

Accepted Answer

A)  are obligations that the company is to pay within the forthcoming year. 
B)  are listed in the balance sheet in order of their expected maturity. 
C)  are listed in the balance sheet, starting with accounts payable. 
D)  should not include long-term debt that is expected to be paid within the next year. 
A)  are obligations that the company is to pay within the forthcoming year. 
B)  are listed in the balance sheet in order of their expected maturity. 
C)  are listed in the balance sheet, starting with accounts payable. 
D)  should not include long-term debt that is expected to be paid within the next year.

Question 14

A company's operating cycle and fiscal year are usually the same length of time.

Accepted Answer

A) True 
 B)False

Question 15

The purpose of the post-closing trial balance is to

Accepted Answer

A)  prove that no mistakes 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)  prove that no mistakes 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.

Question 16

A liability is classified as a current liability if the company is to pay it within the forthcoming year.

Accepted Answer

A) True 
 B)False

Question 17

Income Summary has a credit balance of $12,000 in J. Wenger Co. after closing revenues and expenses. The entry to close Income Summary is

Accepted Answer

A)  credit Income Summary $12,000, debit J. Wenger, Capital $12,000. 
B)  credit Income Summary $12,000, debit J. Wenger, Drawing $12,000. 
C)  debit Income Summary $12,000, credit J. Wenger, Drawing $12,000. 
D)  debit Income Summary $12,000, credit J. Wenger, Capital $12,000. 
A)  credit Income Summary $12,000, debit J. Wenger, Capital $12,000. 
B)  credit Income Summary $12,000, debit J. Wenger, Drawing $12,000. 
C)  debit Income Summary $12,000, credit J. Wenger, Drawing $12,000. 
D)  debit Income Summary $12,000, credit J. Wenger, Capital $12,000.

Question 18

An unacceptable way to make a correcting entry is to

Accepted Answer

A)  reverse the incorrect entry. 
B)  erase the incorrect entry. 
C)  compare the incorrect entry with the correct entry and make a correcting entry to correct the accounts. 
D)  correct it immediately upon discovery. 
A)  reverse the incorrect entry. 
B)  erase the incorrect entry. 
C)  compare the incorrect entry with the correct entry and make a correcting entry to correct the accounts. 
D)  correct it immediately upon discovery.

Question 19

Compute the dollar amount of current assets based on the following account balances.

Accepted Answer

Current assets amoun

Question 20

The financial statement columns of the worksheet for Peters Company as of December 31, 2010 are as follows:   
Instructions
Prepare a classified balance sheet for Peters Company.

Accepted Answer

The answer of The financial statement columns of the worksheet...

Exam 4: Completing the Accounting Cycle

A reversing entry

The income statement for the month of June, 2010 of Ramirez Enterprises contains the following information: The entry to close Income Summary to Ramirez, Capital includes

A post-closing trial balance should be prepared

The operating cycle of a company is the average time that is required to go from cash to

Which of the following liabilities are not related to the operating cycle?

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 two optional steps in the accounting cycle are preparing

The following information is for Benton Office Supplies: The total dollar amount of liabilities to be classified as current liabilities is

Which of the following is an optional step in the accounting cycle?

In preparing closing entries

Which of the following would not be classified a long-term liability?

On a classified balance sheet, current assets are customarily listed

Current liabilities

A company's operating cycle and fiscal year are usually the same length of time.

The purpose of the post-closing trial balance is to

A liability is classified as a current liability if the company is to pay it within the forthcoming year.

Income Summary has a credit balance of $12,000 in J. Wenger Co. after closing revenues and expenses. The entry to close Income Summary is

An unacceptable way to make a correcting entry is to

Compute the dollar amount of current assets based on the following account balances.

The financial statement columns of the worksheet for Peters Company as of December 31, 2010 are as follows: Instructions Prepare a classified balance sheet for Peters Company.

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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