Question 1

The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

Accepted Answer

A) True 
 B)False

Question 2

The income statement for the year 2018 of Fugazi Co. contains the following information:   At January 1, 2018, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2018, 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 3

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

Accepted Answer

A)  They should be inserted in alphabetical order into the trial balance accounts already given. 
B)  They should be inserted in chart of account order into the trial balance already given. 
C)  They should be inserted on the lines immediately below the trial balance totals. 
D)  They should not be inserted on the trial balance until the next accounting period. 
A)  They should be inserted in alphabetical order into the trial balance accounts already given. 
B)  They should be inserted in chart of account order into the trial balance already given. 
C)  They should be inserted on the lines immediately below the trial balance totals. 
D)  They should not be inserted on the trial balance until the next accounting period.

Question 4

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 5

The income statement for the year 2018 of Fugazi Co. contains the following information:   The entry to close Income Summary to Retained Earnings includes

Accepted Answer

A)  a debit to Revenue for $70,000. 
B)  credits to Expenses totalling $77,500. 
C)  a credit to Income Summary for $7,500. 
D)  a credit to Retained Earnings for $7,500. 
A)  a debit to Revenue for $70,000. 
B)  credits to Expenses totalling $77,500. 
C)  a credit to Income Summary for $7,500. 
D)  a credit to Retained Earnings for $7,500.

Question 6

Which of the following is a true statement about closing the books of a corporation?

Accepted Answer

A)  Expenses are closed to the Expense Summary account. 
B)  Only revenues are closed to the Income Summary account. 
C)  Revenues and expenses are closed to the Income Summary account. 
D)  Revenues, expenses, and the dividends account are closed to the Income Summary account. 
A)  Expenses are closed to the Expense Summary account. 
B)  Only revenues are closed to the Income Summary account. 
C)  Revenues and expenses are closed to the Income Summary account. 
D)  Revenues, expenses, and the dividends account are closed to the Income Summary account.

Question 7

Prepare the necessary correcting entry for each of the following.
a. A payment on account of $840 was debited to Accounts Payable $480 and credited to Cash $480.
b. The collection of Accounts Receivable of $680 was recorded as a debit to Cash $680 and a credit to Service Revenue $680.

Accepted Answer

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

Question 8

The financial statement columns of the worksheet for Miracle Max at December 31, 2018, are as follows:   
Instructions
(a) Calculate the retained earnings balance that would appear on a balance sheet at December 31, 2018.
(b) Prepare a classified balance sheet for Miracle Max at December 31, 2018 assuming the note payable is a long-term liability.

Accepted Answer

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

Question 9

The ______________ of a company is the average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.

Accepted Answer

The answer of The ______________ of a company is the...

Question 10

The relationship between current assets and current liabilities is important in evaluating a company's

Accepted Answer

A)  profitability. 
B)  liquidity. 
C)  market value. 
D)  accounting cycle. 
A)  profitability. 
B)  liquidity. 
C)  market value. 
D)  accounting cycle.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

Accepted Answer

A)  earned net income for the period. 
B)  an error because debits do not equal credits. 
C)  suffered a net loss for the period. 
D)  to make an adjusting entry. 
A)  earned net income for the period. 
B)  an error because debits do not equal credits. 
C)  suffered a net loss for the period. 
D)  to make an adjusting entry.

Question 13

The dividends account is a permanent account whose balance is carried forward to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 14

The use of fair value to report assets

Accepted Answer

A)  is not allowed under GAAP or IFRS. 
B)  is required by GAAP and IFRS. 
C)  is increasing under GAAP and IFRS, but GAAP has adopted it more broadly. 
D)  is increasing under GAAP and IFRS, but IFRS has adopted it more broadly.
IFRS. 
A)  is not allowed under GAAP or IFRS. 
B)  is required by GAAP and IFRS. 
C)  is increasing under GAAP and IFRS, but GAAP has adopted it more broadly. 
D)  is increasing under GAAP and IFRS, but IFRS has adopted it more broadly.
IFRS.

Question 15

The final closing entry to be journalized is typically the entry that closes the

Accepted Answer

A)  revenue accounts. 
B)  dividends account. 
C)  retained earnings account. 
D)  expense accounts. 
A)  revenue accounts. 
B)  dividends account. 
C)  retained earnings account. 
D)  expense accounts.

Question 16

The income summary account

Accepted Answer

A)  is a permanent account. 
B)  appears on the balance sheet. 
C)  appears on the income statement. 
D)  is a temporary account. 
A)  is a permanent account. 
B)  appears on the balance sheet. 
C)  appears on the income statement. 
D)  is a temporary account.

Question 17

Peter Cook, CPA, was asked by Carol Kane to review the accounting records and prepare the financial statements for her upholstering shop. Peter reviewed the records and found three errors.
1. Cash paid on accounts payable for $930 was recorded as a debit to Accounts Payable $390 and a credit to Cash $390.
2. The purchase of supplies on account for $600 was debited to Equipment $600 and credited to Accounts Payable $600.
3. The company paid dividends of $1,300 and the bookkeeper debited Accounts Receivable for $130 and credited Cash $130.
Instructions
Prepare an analysis of each error showing the
(a) incorrect entry.
(b) correct entry.
(c) correcting entry.

Accepted Answer

The answer of Peter Cook, CPA, was asked by Carol...

Question 18

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 19

What is the term used to describe the owner's equity section of a corporation? (b) Identify the two owners' equity accounts in a corporation and indicate the purpose of each.

Accepted Answer

(a) The owner's equity section for a cor

Question 20

Balance sheet accounts are considered to be

Accepted Answer

A)  temporary stockholders' equity accounts. 
B)  permanent accounts. 
C)  equity accounts. 
D)  nominal accounts. 
A)  temporary stockholders' equity accounts. 
B)  permanent accounts. 
C)  equity accounts. 
D)  nominal accounts.

Exam 4: Completing the Accounting Cycle

The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

The income statement for the year 2018 of Fugazi Co. contains the following information: At January 1, 2018, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2018, the company will report retained earnings of

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

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

The income statement for the year 2018 of Fugazi Co. contains the following information: The entry to close Income Summary to Retained Earnings includes

Which of the following is a true statement about closing the books of a corporation?

Prepare the necessary correcting entry for each of the following. a. A payment on account of $840 was debited to Accounts Payable $480 and credited to Cash $480. b. The collection of Accounts Receivable of $680 was recorded as a debit to Cash $680 and a credit to Service Revenue $680.

The ______________ of a company is the average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.

The relationship between current assets and current liabilities is important in evaluating a company's

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

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

The dividends account is a permanent account whose balance is carried forward to the next accounting period.

The use of fair value to report assets

The final closing entry to be journalized is typically the entry that closes the

The income summary account

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

What is the term used to describe the owner's equity section of a corporation? (b) Identify the two owners' equity accounts in a corporation and indicate the purpose of each.

Balance sheet accounts are considered to be

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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