Question 1

Which of the following is the measure of how quickly an item can be converted to cash?

Accepted Answer

A)  Debt ratio 
B)  Current ratio 
C)  Liquidity 
D)  Accounting cycle 
A)  Debt ratio 
B)  Current ratio 
C)  Liquidity 
D)  Accounting cycle

Question 2

The Depreciation Expense account is a temporary account.

Accepted Answer

A) True 
 B)False

Question 3

An account that is not closed at the end of the period is called a(n):

Accepted Answer

A)  expense account. 
B)  temporary account. 
C)  permanent account. 
D)  revenue entry. 
A)  expense account. 
B)  temporary account. 
C)  permanent account. 
D)  revenue entry.

Question 4

The operating cycle is the process by which companies produce their financial statements for a specific period.

Accepted Answer

A) True 
 B)False

Question 5

The Net Income of Sarah for the year is $25,000. The withdrawals Sarah made during the year amounted to $30,000. Which of the following statements is true of effect of these transactions on Sarah, Capital?

Accepted Answer

A)  Sarah, Capital account decreases by $25,000. 
B)  Sarah, Capital account decreases by $5,000. 
C)  Sarah, Capital account increases by $30,000. 
D)  Sarah, Capital account increases by $25,000. 
A)  Sarah, Capital account decreases by $25,000. 
B)  Sarah, Capital account decreases by $5,000. 
C)  Sarah, Capital account increases by $30,000. 
D)  Sarah, Capital account increases by $25,000.

Question 6

The entries that transfer the revenue, expense, and withdrawal balances to the Owner's Name, Capital account to set these balances to zero for the next period are called:

Accepted Answer

A)  closing entries. 
B)  opening entries. 
C)  adjusting entries. 
D)  temporary accounts. 
A)  closing entries. 
B)  opening entries. 
C)  adjusting entries. 
D)  temporary accounts.

Question 7

John Smith is the owner of Alpha Technologies Inc. The beginning balance in Smith, Capital was $80,000. The revenues and expenses were $60,000 and $40,000, respectively. If no withdrawals were made by Smith during the year, the ending balance in Smith, Capital must be $90,000.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  Owner's Name, Capital 
B)  Service Revenue 
C)  Accounts Receivable 
D)  Salaries Expense 
A)  Owner's Name, Capital 
B)  Service Revenue 
C)  Accounts Receivable 
D)  Salaries Expense

Question 9

Permanent accounts are not closed at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

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

Question 11

The post-closing trial balance shows the updated capital balance.

Accepted Answer

A) True 
 B)False

Question 12

As a part of the closing process, revenues and expenses are closed to a temporary account called the Net Income (loss) account.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true of the worksheet?

Accepted Answer

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

Question 14

A company has $130,000 in current assets; $500,000 in total assets; $90,000 in current liabilities, and $110,000 in total liabilities. The company has a current ratio of:

Accepted Answer

A)  1.44. 
B)  1.48. 
C)  1.73. 
D)  1.18. 
A)  1.44. 
B)  1.48. 
C)  1.73. 
D)  1.18.

Question 15

The process by which companies produce their financial statements for a specific period is called the:

Accepted Answer

A)  operating cycle. 
B)  closing process. 
C)  opening process. 
D)  accounting cycle. 
A)  operating cycle. 
B)  closing process. 
C)  opening process. 
D)  accounting cycle.

Question 16

The following is the adjusted trial balance as of December 31, 2015 of Current Times Watch Company:
   Provide the closing entry for the Income Summary account.

Accepted Answer

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Exam 4: Completing the Accounting Cycle

Which of the following is the measure of how quickly an item can be converted to cash?

The Depreciation Expense account is a temporary account.

An account that is not closed at the end of the period is called a(n):

The operating cycle is the process by which companies produce their financial statements for a specific period.

The Net Income of Sarah for the year is $25,000. The withdrawals Sarah made during the year amounted to $30,000. Which of the following statements is true of effect of these transactions on Sarah, Capital?

The entries that transfer the revenue, expense, and withdrawal balances to the Owner's Name, Capital account to set these balances to zero for the next period are called:

John Smith is the owner of Alpha Technologies Inc. The beginning balance in Smith, Capital was $80,000. The revenues and expenses were $60,000 and $40,000, respectively. If no withdrawals were made by Smith during the year, the ending balance in Smith, Capital must be $90,000.

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

Permanent accounts are not closed at the end of the accounting period.

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

The post-closing trial balance shows the updated capital balance.

As a part of the closing process, revenues and expenses are closed to a temporary account called the Net Income (loss) account.

Which of the following statements is true of the worksheet?

A company has $130,000 in current assets; $500,000 in total assets; $90,000 in current liabilities, and $110,000 in total liabilities. The company has a current ratio of:

The process by which companies produce their financial statements for a specific period is called the:

The following is the adjusted trial balance as of December 31, 2015 of Current Times Watch Company: Provide the closing entry for the Income Summary account.

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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