Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

On May 25, Yellow House Company received a $650 check from Grizzly Bean for services to be performed in the future. The bookkeeper for Yellow House Company incorrectly debited Cash for $650 and credited Accounts Receivable for $650. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

Accepted Answer

A)  debit Cash $650 and credit Unearned Service Revenue $650. 
B)  debit Accounts Receivable $650 and credit Service Revenue $650. 
C)  debit Accounts Receivable $650 and credit Cash $650. 
D)  debit Accounts Receivable $650 and credit Unearned Service Revenue $650. 
A)  debit Cash $650 and credit Unearned Service Revenue $650. 
B)  debit Accounts Receivable $650 and credit Service Revenue $650. 
C)  debit Accounts Receivable $650 and credit Cash $650. 
D)  debit Accounts Receivable $650 and credit Unearned Service Revenue $650.

Question 4

The first required step in the accounting cycle is

Accepted Answer

A)  reversing entries. 
B)  journalizing transactions in the book of original entry. 
C)  analyzing transactions. 
D)  posting transactions. 
A)  reversing entries. 
B)  journalizing transactions in the book of original entry. 
C)  analyzing transactions. 
D)  posting transactions.

Question 5

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

Accepted Answer

A)  Large company with numerous accounts 
B)  Small company with numerous accounts 
C)  All companies, since worksheets are required under generally accepted accounting principles 
D)  Small company with few accounts 
A)  Large company with numerous accounts 
B)  Small company with numerous accounts 
C)  All companies, since worksheets are required under generally accepted accounting principles 
D)  Small company with few accounts

Question 6

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

Accepted Answer

A)  Salaries and wages payable 
B)  Accounts payable 
C)  Utilities payable 
D)  Bonds payable 
A)  Salaries and wages payable 
B)  Accounts payable 
C)  Utilities payable 
D)  Bonds payable

Question 7

Current assets are listed in the order of liquidity.

Accepted Answer

A) True 
 B)False

Question 8

Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is

Accepted Answer

The answer of Zen Arcade paid the weekly payroll on...

Question 9

Prepare the necessary correcting entry for each of the following.
a. A payment of $5,000 for salaries was recorded as a debit to Supplies Expense and a credit to Cash.
b. A purchase of supplies on account for $1,000 was recorded as a debit to Equipment and a credit to Accounts Payable.

Accepted Answer

The answer of Prepare the necessary correcting entry for each...

Question 10

IFRS

Accepted Answer

A)  requires a specific format for the balance sheet (statement of financial position) that is identical to U.S. GAAP. 
B)  requires a specific format for the balance sheet (statement of financial position) that is different from U.S. GAAP. 
C)  requires no specific format for the balance sheet (statement of financial position) but most companies that follow IFRS prepare the statement identical to U.S. GAAP. 
D)  requires no specific format for the balance sheet (statement of financial position) but most companies that follow IFRS prepare the statement in a different format from U.S. GAAP.
IFRS. 
A)  requires a specific format for the balance sheet (statement of financial position) that is identical to U.S. GAAP. 
B)  requires a specific format for the balance sheet (statement of financial position) that is different from U.S. GAAP. 
C)  requires no specific format for the balance sheet (statement of financial position) but most companies that follow IFRS prepare the statement identical to U.S. GAAP. 
D)  requires no specific format for the balance sheet (statement of financial position) but most companies that follow IFRS prepare the statement in a different format from U.S. GAAP.
IFRS.

Question 11

The worksheet for Gibler Rental Company appears below. Using the adjustment data below, complete the worksheet. Add any accounts that are necessary.
Adjustment data:
(a) Prepaid rent expired during August, $3.
(b) Depreciation expense on equipment for the month of August, $8.
(c) Supplies on hand on August 31 amounted to $6.
(d) Salaries and wages expense incurred at August 31 but not yet paid amounted to $10.

Accepted Answer

The answer of The worksheet for Gibler Rental Company appears...

Question 12

The first item listed under current liabilities is usually

Accepted Answer

A)  accounts payable. 
B)  notes payable. 
C)  salaries and wages payable. 
D)  taxes payable. 
A)  accounts payable. 
B)  notes payable. 
C)  salaries and wages payable. 
D)  taxes payable.

Question 13

A double rule (double underline) 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 14

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 15

Closing entries may be prepared from all of the following except

Accepted Answer

A)  Adjusted balances in the ledger 
B)  Income statement and balance sheet columns of the worksheet 
C)  Balance sheet 
D)  Income and retained earnings statements 
A)  Adjusted balances in the ledger 
B)  Income statement and balance sheet columns of the worksheet 
C)  Balance sheet 
D)  Income and retained earnings statements

Question 16

A business entity has only one accounting cycle over its economic existence.

Accepted Answer

A) True 
 B)False

Question 17

Identify which of the following accounts would have balances on a post-closing trial balance.

Accepted Answer

A)  Service Revenue 
B)  Income Summary 
C)  Notes Payable 
D)  Interest Expense 
E)  Cash 
A)  Service Revenue 
B)  Income Summary 
C)  Notes Payable 
D)  Interest Expense 
E)  Cash

Question 18

Closing entries are journalized and posted

Accepted Answer

A)  before the financial statements are prepared. 
B)  after the financial statements are prepared. 
C)  at management's discretion. 
D)  at the end of each interim accounting period. 
A)  before the financial statements are prepared. 
B)  after the financial statements are prepared. 
C)  at management's discretion. 
D)  at the end of each interim accounting period.

Question 19

The following information is for Sunny Day Real Estate:   The total dollar amount of assets to be classified as investments is

Accepted Answer

A)  $0. 
B)  $70,000. 
C)  $85,000. 
D)  $155,000. 
A)  $0. 
B)  $70,000. 
C)  $85,000. 
D)  $155,000.

Question 20

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018:    
What are total long-term liabilities at December 31, 2018?

Accepted Answer

A)  $0 
B)  $70,000 
C)  $88,000 
D)  $90,000 
A)  $0 
B)  $70,000 
C)  $88,000 
D)  $90,000

Exam 4: Completing the Accounting Cycle

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

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

The first required step in the accounting cycle is

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

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

Current assets are listed in the order of liquidity.

Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is

Prepare the necessary correcting entry for each of the following. a. A payment of $5,000 for salaries was recorded as a debit to Supplies Expense and a credit to Cash. b. A purchase of supplies on account for $1,000 was recorded as a debit to Equipment and a credit to Accounts Payable.

IFRS

The first item listed under current liabilities is usually

A double rule (double underline) 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

Closing entries may be prepared from all of the following except

A business entity has only one accounting cycle over its economic existence.

Identify which of the following accounts would have balances on a post-closing trial balance.

Closing entries are journalized and posted

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as investments is

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018: What are total long-term liabilities at December 31, 2018?

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations Perpetual Approach

Inventories Periodic Approach

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, and Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Time Value of Money

Investments

Payroll Accounting

Subsidiary Ledgers and Special Journals

Other Significant Liabilities

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