Question 1

Beginning balance in Capital is $10 000. Revenues are $200 000. Expenses are $120 000. Drawings are $4 000. The ending balance in Capital is $90 000.

Accepted Answer

A) True 
 B)False

Question 2

Net profit (loss)is the difference between the total debits and the total credits in the Income statement columns.

Accepted Answer

A) True 
 B)False

Question 3

Capital is a temporary account.

Accepted Answer

A) True 
 B)False

Question 4

Please refer to the partially completed worksheet below:   How much was the Profit?

Accepted Answer

A) $28 400 
B) $13 600 
C) $22 020 
D) $42 000 
A) $28 400 
B) $13 600 
C) $22 020 
D) $42 000

Question 5

Which of the following accounts would appear in the Income statement debit column?

Accepted Answer

A) Unearned service revenue 
B) Prepaid insurance 
C) Service revenue 
D) Depreciation expense 
A) Unearned service revenue 
B) Prepaid insurance 
C) Service revenue 
D) Depreciation expense

Question 6

Which of the following statements is TRUE about the worksheet?

Accepted Answer

A) Profit is recorded in the Income statement credit column. 
B) Profit is recorded in the Income statement debit column. 
C) Profit is recorded in the adjusted trial balance debit column. 
D) Profit is recorded in the balance sheet debit column. 
A) Profit is recorded in the Income statement credit column. 
B) Profit is recorded in the Income statement debit column. 
C) Profit is recorded in the adjusted trial balance debit column. 
D) Profit is recorded in the balance sheet debit column.

Question 7

Revenue accounts and expense accounts are closed to the Capital account.

Accepted Answer

A) True 
 B)False

Question 8

A balance sheet that has the assets listed above the liabilities and equity sections is a(n):

Accepted Answer

A) classified form balance sheet. 
B) audited form balance sheet. 
C) report form balance sheet. 
D) account form balance sheet. 
A) classified form balance sheet. 
B) audited form balance sheet. 
C) report form balance sheet. 
D) account form balance sheet.

Question 9

A two- year loan payable would be classified as a:

Accepted Answer

A) current liability. 
B) non- current asset. 
C) non- current liability. 
D) current asset. 
A) current liability. 
B) non- current asset. 
C) non- current liability. 
D) current asset.

Question 10

Which of the following is considered a good/safe rule- of- thumb debt ratio for businesses?

Accepted Answer

A) 1.5 or above 
B) 1.0 or above 
C) .6 or below 
D) .8 or below 
A) 1.5 or above 
B) 1.0 or above 
C) .6 or below 
D) .8 or below

Question 11

Asset and liability accounts are closed to the Income summary account.

Accepted Answer

A) True 
 B)False

Question 12

Buildings, land, and equipment would be classified as:

Accepted Answer

A) non- current liabilities. 
B) non- current assets. 
C) current liabilities. 
D) current assets. 
A) non- current liabilities. 
B) non- current assets. 
C) current liabilities. 
D) current assets.

Question 13

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

Accepted Answer

A) Salary expense 
B) Accounts receivable 
C) Service revenue 
D) Drawings 
A) Salary expense 
B) Accounts receivable 
C) Service revenue 
D) Drawings

Question 14

A debt due to be paid within one year (or operating cycle, if longer)is a current liability.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following accounts are temporary accounts that must be closed at the end of the year?

Accepted Answer

A) Assets, liabilities and capital 
B) Revenues, expenses and capital 
C) Assets, liabilities and drawings 
D) Revenues, expenses and drawings 
A) Assets, liabilities and capital 
B) Revenues, expenses and capital 
C) Assets, liabilities and drawings 
D) Revenues, expenses and drawings

Question 16

Service revenue is a permanent account.

Accepted Answer

A) True 
 B)False

Question 17

Please refer to the worksheet below. Adjusting entries have been posted. Calculate the adjusted balances for all accounts and enter them in to the columns for Adjusted Trial Balance.

Accepted Answer

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

Question 18

Interest expense in the worksheet's trial balance column is $3 000. Interest expense in the Income statement column is $7 000. Which of the following entries would have caused this difference?

Accepted Answer

A) A $4 000 debit to Interest expense in the worksheet's adjustments column 
B) A $4 000 credit to Interest expense in the worksheet's adjustments column 
C) A $7 000 credit to Interest expense in the worksheet's adjustments column 
D) A $7 000 credit to Interest payable in the worksheet's adjustments column 
A) A $4 000 debit to Interest expense in the worksheet's adjustments column 
B) A $4 000 credit to Interest expense in the worksheet's adjustments column 
C) A $7 000 credit to Interest expense in the worksheet's adjustments column 
D) A $7 000 credit to Interest payable in the worksheet's adjustments column

Question 19

Service revenue is a temporary account.

Accepted Answer

A) True 
 B)False

Question 20

Please refer to the worksheet below.   How much was the Profit?

Accepted Answer

A) $13 600 
B) $22 020 
C) $42 000 
D) $28 400 
A) $13 600 
B) $22 020 
C) $42 000 
D) $28 400

Exam 4: Completing the Accounting Cycle

Beginning balance in Capital is $10 000. Revenues are $200 000. Expenses are $120 000. Drawings are $4 000. The ending balance in Capital is $90 000.

Net profit (loss)is the difference between the total debits and the total credits in the Income statement columns.

Capital is a temporary account.

Please refer to the partially completed worksheet below: How much was the Profit?

Which of the following accounts would appear in the Income statement debit column?

Which of the following statements is TRUE about the worksheet?

Revenue accounts and expense accounts are closed to the Capital account.

A balance sheet that has the assets listed above the liabilities and equity sections is a(n):

A two- year loan payable would be classified as a:

Which of the following is considered a good/safe rule- of- thumb debt ratio for businesses?

Asset and liability accounts are closed to the Income summary account.

Buildings, land, and equipment would be classified as:

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

A debt due to be paid within one year (or operating cycle, if longer)is a current liability.

Which of the following accounts are temporary accounts that must be closed at the end of the year?

Service revenue is a permanent account.

Please refer to the worksheet below. Adjusting entries have been posted. Calculate the adjusted balances for all accounts and enter them in to the columns for Adjusted Trial Balance.

Interest expense in the worksheet's trial balance column is $3 000. Interest expense in the Income statement column is $7 000. Which of the following entries would have caused this difference?

Service revenue is a temporary account.

Please refer to the worksheet below. How much was the Profit?

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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