Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Closing entries

Accepted Answer

A)  are prepared before the financial statements. 
B)  reduce the number of permanent accounts. 
C)  cause the revenue and expense accounts to have zero balances. 
D)  summarize the activity in every account. 
A)  are prepared before the financial statements. 
B)  reduce the number of permanent accounts. 
C)  cause the revenue and expense accounts to have zero balances. 
D)  summarize the activity in every account.

Question 3

The Income Summary account is an important account that is used

Accepted Answer

A)  during interim periods. 
B)  in preparing adjusting entries. 
C)  annually in preparing closing entries. 
D)  annually in preparing correcting entries. 
A)  during interim periods. 
B)  in preparing adjusting entries. 
C)  annually in preparing closing entries. 
D)  annually in preparing correcting entries.

Question 4

A post-closing trial balance will show

Accepted Answer

A)  only permanent account balances. 
B)  only temporary account balances. 
C)  zero balances for all accounts. 
D)  the amount of net income (or loss) for the period. 
A)  only permanent account balances. 
B)  only temporary account balances. 
C)  zero balances for all accounts. 
D)  the amount of net income (or loss) for the period.

Question 5

The first step in preparing a worksheet is to prepare a ______________ from the general ledger accounts.

Accepted Answer

The answer of The first step in preparing a worksheet...

Question 6

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 7

The adjustments columns of the worksheet for Mandy Company are shown below.
Instructions
(a) Prepare the adjusting entries.
(b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each balance should be extended.

Accepted Answer

The answer of The adjustments columns of the worksheet for...

Question 8

The balance of the depreciation expense account will appear in the income statement debit column of a worksheet.

Accepted Answer

A) True 
 B)False

Question 9

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 10

The operating cycle of a company is determined by the number of years the company has been operating.

Accepted Answer

A) True 
 B)False

Question 11

All of the following statements about the post-closing trial balance are correct except it

Accepted Answer

A)  shows that the accounting equation is in balance. 
B)  provides evidence that the journalizing and posting of closing entries have been properly completed. 
C)  contains only permanent accounts. 
D)  proves that all transactions have been recorded. 
A)  shows that the accounting equation is in balance. 
B)  provides evidence that the journalizing and posting of closing entries have been properly completed. 
C)  contains only permanent accounts. 
D)  proves that all transactions have been recorded.

Question 12

A company's liquidity is concerned with the relationship between long-term investments and long-term debt.

Accepted Answer

A) True 
 B)False

Question 13

A worksheet can be thought of as a(n)

Accepted Answer

A)  permanent accounting record. 
B)  optional device used by accountants. 
C)  part of the general ledger. 
D)  part of the journal. 
A)  permanent accounting record. 
B)  optional device used by accountants. 
C)  part of the general ledger. 
D)  part of the journal.

Question 14

The worksheet for Montoya Company has been completed through the adjusted trial balance. You are ready to extend each amount to the appropriate financial statement column. Indicate for each account, the financial statement column to which the account should be extended by placing a check mark () in the appropriate column.

Accepted Answer

The answer of The worksheet for Montoya Company has been...

Question 15

Correcting entries

Accepted Answer

A)  always affect at least one balance sheet account and one income statement account. 
B)  affect income statement accounts only. 
C)  affect balance sheet accounts only. 
D)  may involve any combination of accounts in need of correction. 
A)  always affect at least one balance sheet account and one income statement account. 
B)  affect income statement accounts only. 
C)  affect balance sheet accounts only. 
D)  may involve any combination of accounts in need of correction.

Question 16

The preparation of a ______________ and ______________ entries are two optional steps in the accounting cycle.

Accepted Answer

worksheet,

Question 17

The step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is

Accepted Answer

A)  analyzing transactions. 
B)  journalizing and posting adjusting entries. 
C)  preparing a post-closing trial balance. 
D)  posting to ledger accounts. 
A)  analyzing transactions. 
B)  journalizing and posting adjusting entries. 
C)  preparing a post-closing trial balance. 
D)  posting to ledger accounts.

Question 18

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018:   The sub-classifications for assets on the company's classified balance sheet would include all of the following except

Accepted Answer

A)  Current Assets. 
B)  Property, Plant, and Equipment. 
C)  Intangible Assets. 
D)  Long-term Assets. 
A)  Current Assets. 
B)  Property, Plant, and Equipment. 
C)  Intangible Assets. 
D)  Long-term Assets.

Question 19

Under IFRS

Accepted Answer

A)  companies can apply fair value to property, plant, and equipment and natural resources. 
B)  companies can apply fair value to property, plant, and equipment but not to natural resources. 
C)  companies can apply fair value to neither property, plant, and equipment nor natural resources. 
D)  companies can apply fair value to natural resources but not to property, plant, and equipment.
IFRS. 
A)  companies can apply fair value to property, plant, and equipment and natural resources. 
B)  companies can apply fair value to property, plant, and equipment but not to natural resources. 
C)  companies can apply fair value to neither property, plant, and equipment nor natural resources. 
D)  companies can apply fair value to natural resources but not to property, plant, and equipment.
IFRS.

Question 20

The IASB and FASB are working on a converged statement of financial position using the headings of

Accepted Answer

A)  assets, liabilities, and equity. 
B)  revenues and expenses. 
C)  assets, liabilities, revenues, expenses and equity. 
D)  operating, investing, and financing.
IFRS. 
A)  assets, liabilities, and equity. 
B)  revenues and expenses. 
C)  assets, liabilities, revenues, expenses and equity. 
D)  operating, investing, and financing.
IFRS.

Exam 4: Completing the Accounting Cycle

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

Closing entries

The Income Summary account is an important account that is used

A post-closing trial balance will show

The first step in preparing a worksheet is to prepare a ______________ from the general ledger accounts.

An unacceptable way to make a correcting entry is to

The adjustments columns of the worksheet for Mandy Company are shown below. Instructions (a) Prepare the adjusting entries. (b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each balance should be extended.

The balance of the depreciation expense account will appear in the income statement debit column of a worksheet.

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

The operating cycle of a company is determined by the number of years the company has been operating.

All of the following statements about the post-closing trial balance are correct except it

A company's liquidity is concerned with the relationship between long-term investments and long-term debt.

A worksheet can be thought of as a(n)

Correcting entries

The preparation of a ______________ and ______________ entries are two optional steps in the accounting cycle.

The step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018: The sub-classifications for assets on the company's classified balance sheet would include all of the following except

Under IFRS

The IASB and FASB are working on a converged statement of financial position using the headings of

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

Filters

The preparation of a and entries are two optional steps in the accounting cycle.