Question 1

The Depreciation Expense account is a temporary account.

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A)  assets, liabilities, and dividends 
B)  revenues, expenses, and dividends 
C)  assets, liabilities, and stockholders' equity 
D)  revenues, expenses, and stockholders' equity 
A)  assets, liabilities, and dividends 
B)  revenues, expenses, and dividends 
C)  assets, liabilities, and stockholders' equity 
D)  revenues, expenses, and stockholders' equity B

Question 3

The current ratio measures ________.

Accepted Answer

A)  a company's ability to sell its long-term assets 
B)  a company's ability to pay current liabilities from its total assets 
C)  a company's ability to pay current liabilities from current assets 
D)  a company's profitability during a particular period 
A)  a company's ability to sell its long-term assets 
B)  a company's ability to pay current liabilities from its total assets 
C)  a company's ability to pay current liabilities from current assets 
D)  a company's profitability during a particular period C

Question 4

Logan Service Company earned revenues of $100,000 and incurred expenses of $107,000. Prepare the entry to close the Income Summary account. Omit explanation.

Accepted Answer

\[\begin{array} { | l | r | r

Question 5

Which of the following accounts will be included in a post-closing trial balance?

Accepted Answer

A)  Service Revenue 
B)  Interest Payable 
C)  Interest Expense 
D)  Utilities Expense 
A)  Service Revenue 
B)  Interest Payable 
C)  Interest Expense 
D)  Utilities Expense

Question 6

Regarding a classified balance sheet, which of the following statements is correct?

Accepted Answer

A)  Accounts are classified by their purchase dates. 
B)  Account balances are listed from the highest amount to the lowest amount. 
C)  Assets are listed in the order of their liquidity. 
D)  Assets are listed in alphabetical order. 
A)  Accounts are classified by their purchase dates. 
B)  Account balances are listed from the highest amount to the lowest amount. 
C)  Assets are listed in the order of their liquidity. 
D)  Assets are listed in alphabetical order.

Question 7

In an accounting cycle, an analysis of transactions is performed at the end of each accounting period.

Accepted Answer

A) True 
 B)False

Question 8

The Common Stock account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 9

A balance sheet prepared in the account form lists the assets at the top and the liabilities and stockholders' equity below.

Accepted Answer

A) True 
 B)False

Question 10

For each account listed, identify the category in which it would appear on a classified balance sheet.
 $\begin{array}{|l|l|r|}
  \hline&&\text { Location on a} \
   &\text {  Account} &\text { Classified Balance Sheet  }\ 
  \hline\text {a  } & \text { Retained Earnings }  \
 \hline \text {  } & \text {Accumulated Depreciation -  }  \
 \text {  b} & \text { Equipment }  \
 \hline \text { c} & \text {Notes Payable (due in twoyears)  }  \
 \hline \text { d } & \text {Unearned Revenue (short-term)  }  \
 \hline \text {  e} & \text {Salaries Payable  }  \
 \hline \text {  f} & \text {Accounts Receivable  }  \
 \hline \text {g  } & \text {  Trademark}  \
 \hline \text {h  } & \text {Prepaid Rent (prepaid for six months)  }  \
 \hline
\end{array}$

Accepted Answer

None

Question 11

Which of the following statements concerning the worksheet is correct?

Accepted Answer

A)  When a worksheet is used, there is no need to make journal entries. 
B)  A worksheet consists of seven sections. 
C)  Section 5 (Income Statement) and Section 6 (Balance Sheet) are optional. 
D)  A completed worksheet is a substitute for the financial statements. 
A)  When a worksheet is used, there is no need to make journal entries. 
B)  A worksheet consists of seven sections. 
C)  Section 5 (Income Statement) and Section 6 (Balance Sheet) are optional. 
D)  A completed worksheet is a substitute for the financial statements.

Question 12

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 13

Under which of the following categories would bonds held as an investment for less than a year appear?

Accepted Answer

A)  long-term assets 
B)  current assets 
C)  long-term liabilities 
D)  current liabilities 
A)  long-term assets 
B)  current assets 
C)  long-term liabilities 
D)  current liabilities

Question 14

Complete Cleaning Services pays out wages every week on Friday. Payroll expense totals $4,000 per week, based on a five-day week. The month of June ended on a Thursday. On Thursday, June 30, Complete made the following accrual adjustment:
 $$\begin{array} { | c | r | r | } 
\hline \text { Wages Expense } & 3,200 & \
\hline \text { Wage Payable } & & 3,200 \
\hline
\end{array}$$ At the same time, they prepared the following reversing entry to be booked on July 1:
 $$\begin{array} { | c | r | r | } 
\hline \text { Wages Payable } & 3,200 & \
\hline \text { Wages Expense } & & 3,200 \
\hline
\end{array}$$ On Friday afternoon, when wages were paid, what journal entry was made? Omit explanation.

Accepted Answer

\[\begin{array} { | c | r | r

Question 15

Reversing entries are special journal entries that ease the burden of accounting for transactions in a later period.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet?

Accepted Answer

A)  The company made a net profit. 
B)  The company incurred a net loss. 
C)  The retained earnings account decreased during the period. 
D)  An error was made. 
A)  The company made a net profit. 
B)  The company incurred a net loss. 
C)  The retained earnings account decreased during the period. 
D)  An error was made.

Question 17

The Salaries Expense account is a temporary account.

Accepted Answer

A) True 
 B)False

Question 18

A company has $110,000 in current assets; $600,000 in total assets; $80,000 in current liabilities, and $140,000 in total liabilities. Calculate the current ratio of the company. (Round your answer to two decimal places.)

Accepted Answer

A)  1.38 
B)  1.82 
C)  1.73 
D)  0.79 
A)  1.38 
B)  1.82 
C)  1.73 
D)  0.79

Question 19

In the worksheet, the adjusted balance of the Service Revenue account appears in the credit column of the income statement.

Accepted Answer

A) True 
 B)False

Question 20

The beginning balance in the Common Stock account of Woodlands Technologies, Inc. was $80,000. The revenues and expenses amounted to $55,000 and $41,000, respectively. During the year, the company did not declare any dividends or issue common stock. The Common Stock account will have $135,000 at the end of the year.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

The Depreciation Expense account is a temporary account.

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

The current ratio measures ________.

Logan Service Company earned revenues of $100,000 and incurred expenses of $107,000. Prepare the entry to close the Income Summary account. Omit explanation.

Which of the following accounts will be included in a post-closing trial balance?

Regarding a classified balance sheet, which of the following statements is correct?

In an accounting cycle, an analysis of transactions is performed at the end of each accounting period.

The Common Stock account is a permanent account.

A balance sheet prepared in the account form lists the assets at the top and the liabilities and stockholders' equity below.

Which of the following statements concerning the worksheet is correct?

Which of the following is a plant asset?

Under which of the following categories would bonds held as an investment for less than a year appear?

Reversing entries are special journal entries that ease the burden of accounting for transactions in a later period.

Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet?

The Salaries Expense account is a temporary account.

A company has $110,000 in current assets; $600,000 in total assets; $80,000 in current liabilities, and $140,000 in total liabilities. Calculate the current ratio of the company. (Round your answer to two decimal places.)

In the worksheet, the adjusted balance of the Service Revenue account appears in the credit column of the income statement.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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