Question 1

Which of the following accounts has a balance equal to Net Income immediately before it is closed?

Accepted Answer

A)  Income Summary 
B)  Owner's Name, Withdrawals 
C)  Net Income 
D)  Owner's Name, Capital 
A)  Income Summary 
B)  Owner's Name, Withdrawals 
C)  Net Income 
D)  Owner's Name, Capital A

Question 2

A balance sheet prepared in the report form lists the assets on the left, and the liabilities and owner's equity on the right.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following accounts are included in an income statement?

Accepted Answer

A)  Land, Salaries Payable 
B)  Owner's Name, Capital, Owner's Contribution 
C)  Furniture, Cash 
D)  Service Revenue, Utilities Expense 
A)  Land, Salaries Payable 
B)  Owner's Name, Capital, Owner's Contribution 
C)  Furniture, Cash 
D)  Service Revenue, Utilities Expense D

Question 4

A current ratio that has increased from the prior period indicates an improvement in the company's ability to pay its current debts.

Accepted Answer

A) True 
 B)False

Question 5

The permanent accounts-assets, liabilities, and capital-are closed to the Owner's Name, Capital account.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  Unearned Service Revenue 
B)  Service Revenue 
C)  Depreciation Expense 
D)  Prepaid Insurance 
A)  Unearned Service Revenue 
B)  Service Revenue 
C)  Depreciation Expense 
D)  Prepaid Insurance

Question 7

Which of the following statements is true of the worksheet?

Accepted Answer

A)  The worksheet is a ledger. 
B)  The worksheet is a document used to summarize data to prepare the financial statements. 
C)  The worksheet is a financial statement issued to the public to communicate the financial results of the company. 
D)  The worksheet is a journal. 
A)  The worksheet is a ledger. 
B)  The worksheet is a document used to summarize data to prepare the financial statements. 
C)  The worksheet is a financial statement issued to the public to communicate the financial results of the company. 
D)  The worksheet is a journal.

Question 8

Which of the following is a plant asset?

Accepted Answer

A)  Equipment 
B)  Patents 
C)  Trademark 
D)  Accounts Receivable 
A)  Equipment 
B)  Patents 
C)  Trademark 
D)  Accounts Receivable

Question 9

Which of the following would be considered the weakest current ratio?

Accepted Answer

A)  0.35 
B)  1.10 
C)  1.25 
D)  1.80 
A)  0.35 
B)  1.10 
C)  1.25 
D)  1.80

Question 10

The Accounts Receivable account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 11

The current ratio measures:

Accepted Answer

A)  the amount of total assets available to the business currently. 
B)  a company's ability to pay current liabilities with its total assets. 
C)  a company's ability to pay current liabilities with current assets. 
D)  a company's profitability during a particular period. 
A)  the amount of total assets available to the business currently. 
B)  a company's ability to pay current liabilities with its total assets. 
C)  a company's ability to pay current liabilities with current assets. 
D)  a company's profitability during a particular period.

Question 12

The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?

Accepted Answer

A)  A $2,000 debit entry to Prepaid Rent in the worksheet's adjustments column 
B)  A $2,000 credit entry to Rent Expense in the worksheet's adjustments column 
C)  A $2,000 credit entry to Prepaid Rent in the worksheet's adjustments column 
D)  A $2,000 debit entry to Cash in the worksheet's adjustments column 
A)  A $2,000 debit entry to Prepaid Rent in the worksheet's adjustments column 
B)  A $2,000 credit entry to Rent Expense in the worksheet's adjustments column 
C)  A $2,000 credit entry to Prepaid Rent in the worksheet's adjustments column 
D)  A $2,000 debit entry to Cash in the worksheet's adjustments column

Question 13

The smaller the current ratio, the higher is the ability of a firm to repay its current debts.

Accepted Answer

A) True 
 B)False

Question 14

The balances of select accounts of Sandra Company as at December 31, 2015 are given below: $$\begin{array} { | l | r | r | } 
\hline & { \text { Debit } } &  { \text { Credit } } \
\hline \text { Building } & \$ 120,000 & \
\hline \text { Cash } & 5,000 & \
\hline \text { Office Supplies } & 700 & \
\hline \text { Furniture } & 3,000 & \
\hline \text { Prepaid Insurance } & 450 & \
\hline \text { Accumulated Depreciation-Furniture } & & \$ 1,000 \
\hline \text { Land } & 35,000 & \
\hline \text { Accumulated Depreciation-Building } & & 4,800 \
\hline \text { Accounts Receivable } & 2,500 & \
\hline
\end{array}$$ 
-Refer to the table above.What are the total long-term assets that would be shown on the balance sheet?

Accepted Answer

A)  $120,000 
B)  $152,200 
C)  $155,000 
D)  $158,000 
A)  $120,000 
B)  $152,200 
C)  $155,000 
D)  $158,000

Question 15

A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries which includes only permanent accounts is called:

Accepted Answer

A)  chart of accounts. 
B)  adjusted trial balance. 
C)  post-closing trial balance. 
D)  pre-closing balance sheet. 
A)  chart of accounts. 
B)  adjusted trial balance. 
C)  post-closing trial balance. 
D)  pre-closing balance sheet.

Question 16

A reversing entry is:

Accepted Answer

A)  a journal entry used to close the temporary accounts after preparation of financial statements. 
B)  a special journal entry used to make the adjustments that took place after preparing the trial balance. 
C)  a special journal entry that eases the burden of accounting for transactions in the next period 
D)  a journal entry passed at the end of an accounting period to match assets with liabilities. 
A)  a journal entry used to close the temporary accounts after preparation of financial statements. 
B)  a special journal entry used to make the adjustments that took place after preparing the trial balance. 
C)  a special journal entry that eases the burden of accounting for transactions in the next period 
D)  a journal entry passed at the end of an accounting period to match assets with liabilities.

Question 17

Refer to the following adjusted trial balance.   What will be the final ending balance in the Owner's Name, Capital account after posting the closing entries?

Accepted Answer

A)  $21,200 
B)  $20,800 
C)  $24,200 
D)  $23,800 
A)  $21,200 
B)  $20,800 
C)  $24,200 
D)  $23,800

Question 18

The Owner's Name, Withdrawals account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 19

In an accounting cycle, which of the following steps takes place only at the end of the accounting period?

Accepted Answer

A)  Start with the beginning account balances. 
B)  Journalize transactions that occur. 
C)  Analyze transactions as they occur. 
D)  Journalize adjusting entries. 
A)  Start with the beginning account balances. 
B)  Journalize transactions that occur. 
C)  Analyze transactions as they occur. 
D)  Journalize adjusting entries.

Question 20

What is the result if the amount of Net Income for the year is less than the amount of the Owner's Withdrawals?

Accepted Answer

A)  Owner's Name, Capital increases 
B)  Cash balance decreases 
C)  Cash balance increases 
D)  Owner's Name, Capital decreases 
A)  Owner's Name, Capital increases 
B)  Cash balance decreases 
C)  Cash balance increases 
D)  Owner's Name, Capital decreases

Exam 4: Completing the Accounting Cycle

Which of the following accounts has a balance equal to Net Income immediately before it is closed?

A balance sheet prepared in the report form lists the assets on the left, and the liabilities and owner's equity on the right.

Which of the following accounts are included in an income statement?

A current ratio that has increased from the prior period indicates an improvement in the company's ability to pay its current debts.

The permanent accounts-assets, liabilities, and capital-are closed to the Owner's Name, Capital account.

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

Which of the following statements is true of the worksheet?

Which of the following is a plant asset?

Which of the following would be considered the weakest current ratio?

The Accounts Receivable account is a permanent account.

The current ratio measures:

The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?

The smaller the current ratio, the higher is the ability of a firm to repay its current debts.

A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries which includes only permanent accounts is called:

A reversing entry is:

Refer to the following adjusted trial balance. What will be the final ending balance in the Owner's Name, Capital account after posting the closing entries?

The Owner's Name, Withdrawals account is a permanent account.

In an accounting cycle, which of the following steps takes place only at the end of the accounting period?

What is the result if the amount of Net Income for the year is less than the amount of the Owner's Withdrawals?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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