Question 1

Reversing Entries are more relevant in corporations.

Accepted Answer

A) True 
 B)False

Question 2

The owner's drawings account is closed to the Income Summary account in order to properly determine Profit (or loss) for the period.

Accepted Answer

A) True 
 B)False

Question 3

The following items are taken from the financial statements of Maxon Service for 2013:   Instructions
a. Prepare an income statement and a classified balance sheet for Maxon Sales.
b. Calculate the following ratios and values:
1. Current ratio
2. Working capital
3. Acid-test ratio 
a. Prepare an income statement and a classified balance sheet for Maxon Sales.
b. Calculate the following ratios and values:

Accepted Answer

The answer of The following items are taken from the...

Question 4

Common Canadian practice shows current assets as the first items listed on a classified balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

At March 31, 2014, account balances after adjustments for Maddux Cinema are as follows:   Instructions 
a. Prepare the closing journal entries for Maddux Cinema.
b. Prepare a post-closing trial balance.

Accepted Answer

The answer of At March 31, 2014, account balances after...

Question 6

The Saint John River Company received $630 on account from a customer. The transaction was erroneously recorded as a debit to Cash of $360 and a credit to Accounts Payable, $360. The correcting entry is

Accepted Answer

The answer of The Saint John River Company received $630...

Question 7

If errors occur in the recording process, they

Accepted Answer

A)  should be corrected as adjustments at the end of the period. 
B)  should be corrected as soon as they are discovered. 
C)  should be corrected when preparing annual financial statements. 
D)  cannot be corrected until the next accounting period. 
A)  should be corrected as adjustments at the end of the period. 
B)  should be corrected as soon as they are discovered. 
C)  should be corrected when preparing annual financial statements. 
D)  cannot be corrected until the next accounting period.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The balances that appear on the post-closing trial balance will match the

Accepted Answer

A)  income statement account balances after adjustments. 
B)  balance sheet account balances after closing entries. 
C)  income statement account balances after closing entries. 
D)  balance sheet account balances after adjustments. 
A)  income statement account balances after adjustments. 
B)  balance sheet account balances after closing entries. 
C)  income statement account balances after closing entries. 
D)  balance sheet account balances after adjustments.

Question 10

The acid-test ratio is a measure of a company's long term liquidity.

Accepted Answer

A) True 
 B)False

Question 11

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.

Question 12

Jasmine Company received a $350 cheque from a customer for the balance due on an accounts receivable. The transaction was erroneously recorded as a debit to cash of $530 and a credit to service revenue of $530. The correcting entry is

Accepted Answer

A)  debit Accounts Receivable $350; credit Cash $350 
B)  debit Accounts Receivable $180; credit Cash $180 
C)  debit Service Revenue $530; credit Cash $180; credit Accounts Receivable $350 
D)  debit Service Revenue $530; credit Cash $350; credit Accounts Receivable $180 
A)  debit Accounts Receivable $350; credit Cash $350 
B)  debit Accounts Receivable $180; credit Cash $180 
C)  debit Service Revenue $530; credit Cash $180; credit Accounts Receivable $350 
D)  debit Service Revenue $530; credit Cash $350; credit Accounts Receivable $180

Question 13

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)  close all of the permanent accounts. 
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)  close all of the permanent accounts.

Question 14

The final step in the accounting cycle is the pre-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 15

The most 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.

Question 16

Transaction and adjustment data for Portiski Company for the year ended September 30 is as follows:
1. September 24 (initial salary entry): $12,000 of salaries earned between September 1 and September 24 are paid.
2. September 30 (adjusting entry): Salaries earned between September 25 and September 30 are $5,000. These will be paid in the October 8 payroll.
3. October 8 (subsequent salary entry): Total salary payroll amounting to $9,000 was paid.
Instructions
Prepare two sets of journal entries as specified below. The first set of journal entries should assume that the company does not use reversing entries, and the second set should assume that reversing entries are utilized by the company.

Accepted Answer

The answer of Transaction and adjustment data for Portiski Company...

Question 17

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 the same as the adjusting entry made in a previous period. 
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 the same as the adjusting entry made in a previous period. 
D)  is made when a company sustains a loss in one period and reverses the effect with a profit in the next period.

Question 18

The following information is available for Juxton Company for the year ended December 31, 2013:   Instructions
Use the above information to prepare a classified balance sheet for the year ended December 31, 2013.

Accepted Answer

The answer of The following information is available for Juxton...

Question 19

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

Accepted Answer

A) True 
 B)False

Question 20

Current assets are normally listed in the balance sheet in order of permanency.

Accepted Answer

A) True 
 B)False

Reversing Entries are more relevant in corporations.

The owner's drawings account is closed to the Income Summary account in order to properly determine Profit (or loss) for the period.

Common Canadian practice shows current assets as the first items listed on a classified balance sheet.

At March 31, 2014, account balances after adjustments for Maddux Cinema are as follows: Instructions a. Prepare the closing journal entries for Maddux Cinema. b. Prepare a post-closing trial balance.

The Saint John River Company received $630 on account from a customer. The transaction was erroneously recorded as a debit to Cash of $360 and a credit to Accounts Payable, $360. The correcting entry is

If errors occur in the recording process, they

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

The balances that appear on the post-closing trial balance will match the

The acid-test ratio is a measure of a company's long term liquidity.

The purpose of the post-closing trial balance is to

Jasmine Company received a $350 cheque from a customer for the balance due on an accounts receivable. The transaction was erroneously recorded as a debit to cash of $530 and a credit to service revenue of $530. The correcting entry is

Closing entries

The final step in the accounting cycle is the pre-closing trial balance.

The most important information needed to determine if companies can pay their current obligations is the

A reversing entry

The following information is available for Juxton Company for the year ended December 31, 2013: Instructions Use the above information to prepare a classified balance sheet for the year ended December 31, 2013.

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

Current assets are normally listed in the balance sheet in order of permanency.

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 4: Completion of the Accounting Cycle

Reversing Entries are more relevant in corporations.

The owner's drawings account is closed to the Income Summary account in order to properly determine Profit (or loss) for the period.

Common Canadian practice shows current assets as the first items listed on a classified balance sheet.

At March 31, 2014, account balances after adjustments for Maddux Cinema are as follows: Instructions a. Prepare the closing journal entries for Maddux Cinema. b. Prepare a post-closing trial balance.

The Saint John River Company received $630 on account from a customer. The transaction was erroneously recorded as a debit to Cash of $360 and a credit to Accounts Payable, $360. The correcting entry is

If errors occur in the recording process, they

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

The balances that appear on the post-closing trial balance will match the

The acid-test ratio is a measure of a company's long term liquidity.

The purpose of the post-closing trial balance is to

Jasmine Company received a $350 cheque from a customer for the balance due on an accounts receivable. The transaction was erroneously recorded as a debit to cash of $530 and a credit to service revenue of $530. The correcting entry is

Closing entries

The final step in the accounting cycle is the pre-closing trial balance.

The most important information needed to determine if companies can pay their current obligations is the

A reversing entry

The following information is available for Juxton Company for the year ended December 31, 2013: Instructions Use the above information to prepare a classified balance sheet for the year ended December 31, 2013.

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

Current assets are normally listed in the balance sheet in order of permanency.

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters