Question 1

The worksheet is an external tool that can be used to help in recording adjusting entries and preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 2

A business starts each new time period with a zero beginning balance in permanent accounts.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following should NOT be considered when comparing the Adjusted Trial Balance to the Post-Closing Trial Balance to ensure that no errors were made in the closing process?

Accepted Answer

A)  Account balances above Retained Earnings are the same. 
B)  The account balances on each of the trial balances are the same. 
C)  Account balances below Retained Earnings are zero. 
D)  The Retained Earnings account balance on the post-closing trial balance matches Retained Earnings on the balance sheet. 
A)  Account balances above Retained Earnings are the same. 
B)  The account balances on each of the trial balances are the same. 
C)  Account balances below Retained Earnings are zero. 
D)  The Retained Earnings account balance on the post-closing trial balance matches Retained Earnings on the balance sheet.

Question 4

The following is the adjusted trial balance as of December 31, 2018 of Bravo Photography:
 $\begin{array}{|l|c|c|}
\hline \text { Account } & \text { Debit } & \text { Credit } \
\hline \text { Cash } & \$ 1,700 & \
\hline \text { Accounts Receivable } & 8,500 & \
\hline \text { Supplies } & 100 & \
\hline \text { Equipment } & 7,500 & \
\hline \text { Accumulated Depreciation-Equipment } & & \$ 2,000 \
\hline \text { Accounts Payable } & & 1,200 \
\hline \text { Salaries Payable } & & 800 \
\hline \text { Unearned Revenue } & & 600 \
\hline \text { Common Stock } & & 3,400 \
\hline \text { Dividends } & 2,300 & \
\hline \text { Service Revenue } & & 40,000 \
\hline \text { Salaries Expense } & 24,000 & \
\hline \text { Supplies Expense } & 2,300 & \
\hline \text { Depreciation Expense-Equipment } & 1,600 & \
\hline \text { Total } & \$ 48,000 & \$ 48,000 \
\hline
\end{array}$ Provide the closing entry for revenues. Omit explanation.

Accepted Answer

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

Question 5

Which financial statement is prepared last?

Accepted Answer

A)  income statement 
B)  balance sheet 
C)  statement of retained earnings 
D)  The financial statements can be prepared in any order. 
A)  income statement 
B)  balance sheet 
C)  statement of retained earnings 
D)  The financial statements can be prepared in any order.

Question 6

The current ratio measures a company's ________.

Accepted Answer

A)  overall ability to pay liabilities 
B)  ability to pay current liabilities from current assets 
C)  proportion of assets that are financed by debt 
D)  rate of cash flow 
A)  overall ability to pay liabilities 
B)  ability to pay current liabilities from current assets 
C)  proportion of assets that are financed by debt 
D)  rate of cash flow

Question 7

After closing entries have been posted ________.

Accepted Answer

A)  the ending balance of Retained Earnings has been properly updated 
B)  only permanent accounts carry balances 
C)  dividends have been closed into Retained Earnings 
D)  All of the statements are correct. 
A)  the ending balance of Retained Earnings has been properly updated 
B)  only permanent accounts carry balances 
C)  dividends have been closed into Retained Earnings 
D)  All of the statements are correct.

Question 8

Reversing entries are ________.

Accepted Answer

A)  the exact opposite of a prior adjusting entry 
B)  dated the last day of the new period 
C)  required according to GAAP 
D)  expensive to record and time consuming 
A)  the exact opposite of a prior adjusting entry 
B)  dated the last day of the new period 
C)  required according to GAAP 
D)  expensive to record and time consuming

Question 9

Brownstone, Inc. has a current ratio of 6.00. This indicates that the company has $6 in ________.

Accepted Answer

A)  current liabilities for every $1 of current assets 
B)  total assets for every $1 of current liabilities 
C)  current assets for every $1 of current liabilities 
D)  total assets for every $1 of current assets 
A)  current liabilities for every $1 of current assets 
B)  total assets for every $1 of current liabilities 
C)  current assets for every $1 of current liabilities 
D)  total assets for every $1 of current assets

Question 10

The following information is provided for Journey Inc. and Mastery Inc. Both corporations provide training materials for electricians.
Current Ratio
 $$\begin{array} { | l | c | c | } 
\hline \text { Company } & \mathbf { 2 0 1 8 } & \mathbf { 2 0 1 9 } \
\hline \text { Journey Inc. } & 1.8 & 1.2 \
\hline \text { Mastery Inc. } & .8 & 1.4 \
\hline
\end{array}$$ a. Which company has the stronger current ratio for 2018 and 2019? Defend your answer.
b. Discuss the change in current ratio for each company.

Accepted Answer

a. For 2018, Journey Inc. has the strong

Question 11

The net income of Hendley, Inc. for the year is $35,000. The dividends declared during the year were $43,000. Which of the following statements is true?

Accepted Answer

A)  Retained Earnings account decreases by $35,000. 
B)  Retained Earnings account decreases by $8,000. 
C)  Retained Earnings account increases by $43,000. 
D)  Retained Earnings will remain the same. 
A)  Retained Earnings account decreases by $35,000. 
B)  Retained Earnings account decreases by $8,000. 
C)  Retained Earnings account increases by $43,000. 
D)  Retained Earnings will remain the same.

Question 12

Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet.

Accepted Answer

A) True 
 B)False

Question 13

In a balance sheet, prepared under IFRS guidelines, cash is often shown as one of the last assets listed.

Accepted Answer

A) True 
 B)False

Question 14

Property, plant, and equipment are ________.

Accepted Answer

A)  presented in order of the category name, with Land being presented last 
B)  also called fixed or plant assets 
C)  either tangible or intangible assets 
D)  easily converted to cash 
A)  presented in order of the category name, with Land being presented last 
B)  also called fixed or plant assets 
C)  either tangible or intangible assets 
D)  easily converted to cash

Question 15

Revenue may be called Profit and Net Income may be called Turnover in an income statement prepared under IFRS.

Accepted Answer

A) True 
 B)False

Question 16

Perry Service Company had the following unadjusted balances at December 31, 2018: Salaries Payable, $0; Salaries Expense, $12,000. The following transactions took place on December 31, 2018:
Accrued Salaries Expense, $5,000
Closed the Salaries Expense account.
The following transaction took place on January 4, 2019:
Paid salaries of $6,000. This payment included $5,000 that was accrued on December 31, 2018 and $1,000 for the first few days in January 2019.
Prepare the journal entry for January 4, 2019, assuming that reversing entries were not made. Omit explanation.

Accepted Answer

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

Question 17

A classified balance sheet can be presented in either a report or an account form. Although either is acceptable, the report form is more popular.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  Accumulated Depreciation-Building 
B)  Rent Expense 
C)  Interest Expense 
D)  Service Revenue 
A)  Accumulated Depreciation-Building 
B)  Rent Expense 
C)  Interest Expense 
D)  Service Revenue

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The balance sheet is the first financial statement that is prepared at the end of the period.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

The worksheet is an external tool that can be used to help in recording adjusting entries and preparing financial statements.

A business starts each new time period with a zero beginning balance in permanent accounts.

Which of the following should NOT be considered when comparing the Adjusted Trial Balance to the Post-Closing Trial Balance to ensure that no errors were made in the closing process?

Which financial statement is prepared last?

The current ratio measures a company's ________.

After closing entries have been posted ________.

Reversing entries are ________.

Brownstone, Inc. has a current ratio of 6.00. This indicates that the company has $6 in ________.

The net income of Hendley, Inc. for the year is $35,000. The dividends declared during the year were $43,000. Which of the following statements is true?

Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet.

In a balance sheet, prepared under IFRS guidelines, cash is often shown as one of the last assets listed.

Property, plant, and equipment are ________.

Revenue may be called Profit and Net Income may be called Turnover in an income statement prepared under IFRS.

A classified balance sheet can be presented in either a report or an account form. Although either is acceptable, the report form is more popular.

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

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

The balance sheet is the first financial statement that is prepared at the end of the period.

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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