Question 1

Assets and liabilities are presented in a different order on a balance sheet prepared following IFRS than on a balance sheet prepared following U.S. GAAP.

Accepted Answer

A) True 
 B)False

Question 2

List the order in which the balance sheet, statement of retained earnings, and income statement are prepared. Briefly discuss why this order is necessary.

Accepted Answer

The order in which these statements are

Question 3

GAAP requires publicly traded companies to prepare a post-closing trial balance and publish it in their annual report.

Accepted Answer

A) True 
 B)False

Question 4

Prepaid Rent is always classified as a long-term asset.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the most liquid asset?

Accepted Answer

A)  Building 
B)  Prepaid Expenses 
C)  Accounts Receivable 
D)  Cash 
A)  Building 
B)  Prepaid Expenses 
C)  Accounts Receivable 
D)  Cash

Question 6

Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?

Accepted Answer

A)  debit Insurance Expense and credit Income Summary 
B)  debit Insurance Expense and credit Common Stock 
C)  debit Retained Earnings and credit Insurance Expense 
D)  debit Income Summary and credit Insurance Expense 
A)  debit Insurance Expense and credit Income Summary 
B)  debit Insurance Expense and credit Common Stock 
C)  debit Retained Earnings and credit Insurance Expense 
D)  debit Income Summary and credit Insurance Expense

Question 7

The Supplies Expense account is a temporary account.

Accepted Answer

A) True 
 B)False

Question 8

The time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash, is called the ________.

Accepted Answer

A)  production time 
B)  operating cycle 
C)  accounting cycle 
D)  sales time 
A)  production time 
B)  operating cycle 
C)  accounting cycle 
D)  sales time

Question 9

Which of the following statements is an accurate interpretation of the current ratio?

Accepted Answer

A)  A current ratio of 1.5 or higher is considered a high-risk ratio. 
B)  A current ratio below 1.00 is considered a good and safe ratio. 
C)  A current ratio of 2.0 indicates a strong ability to pay current liabilities. 
D)  A current ratio of 0.60 or lower is a good and safe ratio. 
A)  A current ratio of 1.5 or higher is considered a high-risk ratio. 
B)  A current ratio below 1.00 is considered a good and safe ratio. 
C)  A current ratio of 2.0 indicates a strong ability to pay current liabilities. 
D)  A current ratio of 0.60 or lower is a good and safe ratio.

Question 10

Which of the following steps must be completed before preparing the adjusted trial balance?

Accepted Answer

A)  Prepare the post-closing trial balance. 
B)  Post journal entries to the accounts. 
C)  Journalize and post the closing entries. 
D)  Prepare the financial statements. 
A)  Prepare the post-closing trial balance. 
B)  Post journal entries to the accounts. 
C)  Journalize and post the closing entries. 
D)  Prepare the financial statements.

Question 11

In a balance sheet, assets are classified as either current or long term, depending on their liquidity.

Accepted Answer

A) True 
 B)False

Question 12

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 13

In which of the columns of the worksheet would Net Income be found?

Accepted Answer

A)  the unadjusted trial balance credit column, the adjusted trial balance credit column, and the balance sheet credit column 
B)  the unadjusted trial balance debit column, the adjusted trial balance debit column, and the balance sheet debit column 
C)  the balance sheet debit column and the income statement credit column 
D)  the balance sheet credit column and the income statement debit column 
A)  the unadjusted trial balance credit column, the adjusted trial balance credit column, and the balance sheet credit column 
B)  the unadjusted trial balance debit column, the adjusted trial balance debit column, and the balance sheet debit column 
C)  the balance sheet debit column and the income statement credit column 
D)  the balance sheet credit column and the income statement debit column

Question 14

The balances of select accounts of Sandra, Inc. as of December 31, 2018 are given below: $$\begin{array} { | l | r | r | } 
\hline & { \text { Debit } } & \text { Credit } \
\hline \text { Building } & \$ 130,000 & \
\hline \text { Cash } & 5,000 & \
\hline \text { Office Supplies } & 800 & \
\hline \text { Furniture } & 5,000 & \
\hline \text { Prepaid Insurance } & 450 & \
\hline \text { Accumulated Depreciation-Furniture } & & \$ 1,000 \
\hline \text { Land } & 32,000 & \
\hline \text { Accumulated Depreciation-Building } & & 4,600 \
\hline \text { Accounts Receivable } & 2,300 & \
\hline
\end{array}$$ The insurance has been prepaid until June 30, 2019. Determine the amount of total current assets reported on the balance sheet at December 31, 2018.

Accepted Answer

A)  $12,300 
B)  $5,800 
C)  $8,550 
D)  $6,250 
A)  $12,300 
B)  $5,800 
C)  $8,550 
D)  $6,250

Question 15

Answer the following questions regarding the current ratio:
 $\begin{array}{|l|l|}
\hline \text { Current Ratio Question } & \text { Answer } \
\hline \text { What does the current ratio } & \
\text { measure? } & \
\hline \text { How is the current ratio } \
\text { calculated? }\
\hline \text { When analyzing the current }\
 \text {ratio, what is the rule of }\
 \text {tlaunb?}\
\hline
\end{array}$

Accepted Answer

None

Question 16

A list of the accounts and their balances at the end of the period, after journalizing and posting the closing entries, 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 17

Which of the following is NOT a balance sheet account?

Accepted Answer

A)  Unearned Revenue 
B)  Prepaid Rent 
C)  Accumulated Depreciation - Building 
D)  Dividends 
A)  Unearned Revenue 
B)  Prepaid Rent 
C)  Accumulated Depreciation - Building 
D)  Dividends

Question 18

The steps of the accounting cycle are followed throughout the accounting period.

Accepted Answer

A) True 
 B)False

Question 19

Why are temporary accounts not included in the post-closing trial balance?

Accepted Answer

Temporary accounts - revenues,

Question 20

Generally Accepted Accounting Principles (GAAP) require every organization to prepare reversing entries.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

Assets and liabilities are presented in a different order on a balance sheet prepared following IFRS than on a balance sheet prepared following U.S. GAAP.

List the order in which the balance sheet, statement of retained earnings, and income statement are prepared. Briefly discuss why this order is necessary.

GAAP requires publicly traded companies to prepare a post-closing trial balance and publish it in their annual report.

Prepaid Rent is always classified as a long-term asset.

Which of the following is the most liquid asset?

Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?

The Supplies Expense account is a temporary account.

The time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash, is called the ________.

Which of the following statements is an accurate interpretation of the current ratio?

Which of the following steps must be completed before preparing the adjusted trial balance?

In a balance sheet, assets are classified as either current or long term, depending on their liquidity.

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

In which of the columns of the worksheet would Net Income be found?

Answer the following questions regarding the current ratio: Current Ratio Question Answer What does the current ratio measure? How is the current ratio calculated? When analyzing the current ratio, what is the rule of tlaunb?

A list of the accounts and their balances at the end of the period, after journalizing and posting the closing entries, is called ________.

Which of the following is NOT a balance sheet account?

The steps of the accounting cycle are followed throughout the accounting period.

Why are temporary accounts not included in the post-closing trial balance?

Generally Accepted Accounting Principles (GAAP) require every organization to prepare reversing entries.

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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