Question 1

Which of the following accounts would appear in the balance sheet credit column?

Accepted Answer

A) Buildings 
B) Prepaid insurance 
C) Service revenue 
D) Unearned service revenue 
A) Buildings 
B) Prepaid insurance 
C) Service revenue 
D) Unearned service revenue

Question 2

Assets are listed in order of on the balance sheet.

Accepted Answer

A) amount 
B) liquidity 
C) date of purchase 
D) durability 
A) amount 
B) liquidity 
C) date of purchase 
D) durability

Question 3

The current ratio is a measure of a company's:

Accepted Answer

A) profitability. 
B) leverage. 
C) liquidity. 
D) solvency. 
A) profitability. 
B) leverage. 
C) liquidity. 
D) solvency.

Question 4

Adkins Company has a current ratio of 1.0 and a debt ratio of 0.7. Wilson Company has a current ratio of 1.4 and a debt ratio of 0.5. Both companies are in the same industry. Which of the following statements is TRUE?

Accepted Answer

A) The two companies' debt ratios and current ratios vary in different directions, and the companies appear to be in similar financial shape. 
B) The two companies' debt ratios and current ratios vary in different directions, and these results do not make sense. 
C) Wilson Company appears to be in better financial shape than Adkins Company. 
D) Adkins Company appears to be in better financial shape than Wilson Company. 
A) The two companies' debt ratios and current ratios vary in different directions, and the companies appear to be in similar financial shape. 
B) The two companies' debt ratios and current ratios vary in different directions, and these results do not make sense. 
C) Wilson Company appears to be in better financial shape than Adkins Company. 
D) Adkins Company appears to be in better financial shape than Wilson Company.

Question 5

Beginning balance in Capital is $80 000. Revenues are $60 000. Expenses are $75 000. No drawings were taken. The ending balance in Capital is $65 000.

Accepted Answer

A) True 
 B)False

Question 6

The definition of liquidity is how:

Accepted Answer

A) short an operating cycle is. 
B) easily an asset can be exchanged for another asset. 
C) long an asset can be used. 
D) quickly an item can be converted to cash. 
A) short an operating cycle is. 
B) easily an asset can be exchanged for another asset. 
C) long an asset can be used. 
D) quickly an item can be converted to cash.

Question 7

Please refer to the worksheet below. Please complete the worksheet, including the balancing amounts in the last row.

Accepted Answer

The answer of Please refer to the worksheet below. Please...

Question 8

Which debt ratio would indicate the BEST overall ability of an organization to pay its debts?

Accepted Answer

A) 60% 
B) 25% 
C) 40% 
D) 130% 
A) 60% 
B) 25% 
C) 40% 
D) 130%

Question 9

Which of the following accounts will be closed by debiting the Income summary account?

Accepted Answer

A) Accounts payable 
B) Depreciation expense 
C) Service revenue 
D) Accumulated depreciation 
A) Accounts payable 
B) Depreciation expense 
C) Service revenue 
D) Accumulated depreciation

Question 10

Which of the following accounts will be closed by crediting the Income summary account?

Accepted Answer

A) Accumulated depreciation 
B) Service revenue 
C) Accounts payable 
D) Depreciation expense 
A) Accumulated depreciation 
B) Service revenue 
C) Accounts payable 
D) Depreciation expense

Question 11

Profit for the year is $25 000. Drawings of $36 000 per were taken at the end of the year. Which of the following occurs?

Accepted Answer

A) The Capital account increases by $11 000. 
B) The Capital account increases by $22 000. 
C) The Capital account decreases by $11 000. 
D) The Capital account decreases by $22 000. 
A) The Capital account increases by $11 000. 
B) The Capital account increases by $22 000. 
C) The Capital account decreases by $11 000. 
D) The Capital account decreases by $22 000.

Question 12

Drawings is a permanent account.

Accepted Answer

A) True 
 B)False

Question 13

Revenue accounts and expense accounts are closed to the Income summary account.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following does NOT appear on the worksheet?

Accepted Answer

A) Profit 
B) Closing entries 
C) Adjusting entries 
D) Adjusted balances 
A) Profit 
B) Closing entries 
C) Adjusting entries 
D) Adjusted balances

Question 15

The formula for computing a current ratio is:

Accepted Answer

A) Current assets/Total equity. 
B) Current assets/Total liabilities. 
C) Current assets/Current liabilities. 
D) Current assets/Total assets. 
A) Current assets/Total equity. 
B) Current assets/Total liabilities. 
C) Current assets/Current liabilities. 
D) Current assets/Total assets.

Question 16

Which of the following accounts would appear in the balance sheet debit column?

Accepted Answer

A) Accumulated depreciation 
B) Service revenue 
C) Unearned service revenue 
D) Prepaid insurance 
A) Accumulated depreciation 
B) Service revenue 
C) Unearned service revenue 
D) Prepaid insurance

Question 17

Under which of the following categories would Land appear?

Accepted Answer

A) Non- current assets 
B) Non- current liabilities 
C) Current assets 
D) Current liabilities 
A) Non- current assets 
B) Non- current liabilities 
C) Current assets 
D) Current liabilities

Question 18

Only temporary accounts appear on the post- closing trial balance.

Accepted Answer

A) True 
 B)False

Question 19

What is TRUE if the Income statement credit column exceeds the Income statement debit column on a worksheet?

Accepted Answer

A) The company has a profit. 
B) Total liabilities exceed total assets. 
C) The capital account decreased during the period. 
D) The company has a loss. 
A) The company has a profit. 
B) Total liabilities exceed total assets. 
C) The capital account decreased during the period. 
D) The company has a loss.

Question 20

Which of the following entries will be necessary to close the appropriate depreciation account at the end of the year?

Accepted Answer

A) Debit Income summary and credit Depreciation expense 
B) Debit Income summary and credit Accumulated depreciation 
C) Debit Accumulated depreciation and credit Income summary 
D) Debit Depreciation expense and credit Income summary 
A) Debit Income summary and credit Depreciation expense 
B) Debit Income summary and credit Accumulated depreciation 
C) Debit Accumulated depreciation and credit Income summary 
D) Debit Depreciation expense and credit Income summary

Exam 4: Completing the Accounting Cycle

Which of the following accounts would appear in the balance sheet credit column?

Assets are listed in order of on the balance sheet.

The current ratio is a measure of a company's:

Adkins Company has a current ratio of 1.0 and a debt ratio of 0.7. Wilson Company has a current ratio of 1.4 and a debt ratio of 0.5. Both companies are in the same industry. Which of the following statements is TRUE?

Beginning balance in Capital is $80 000. Revenues are $60 000. Expenses are $75 000. No drawings were taken. The ending balance in Capital is $65 000.

The definition of liquidity is how:

Please refer to the worksheet below. Please complete the worksheet, including the balancing amounts in the last row.

Which debt ratio would indicate the BEST overall ability of an organization to pay its debts?

Which of the following accounts will be closed by debiting the Income summary account?

Which of the following accounts will be closed by crediting the Income summary account?

Profit for the year is $25 000. Drawings of $36 000 per were taken at the end of the year. Which of the following occurs?

Drawings is a permanent account.

Revenue accounts and expense accounts are closed to the Income summary account.

Which of the following does NOT appear on the worksheet?

The formula for computing a current ratio is:

Which of the following accounts would appear in the balance sheet debit column?

Under which of the following categories would Land appear?

Only temporary accounts appear on the post- closing trial balance.

What is TRUE if the Income statement credit column exceeds the Income statement debit column on a worksheet?

Which of the following entries will be necessary to close the appropriate depreciation account at the end of the year?

The Role of Accounting in Business

Recording Business Transactions

The Adjusting Process

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Share Capital and the Balance Sheet

Companies: Effects on Retained Earnings, Share Splits and Buy-Backs, and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

Appendix

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