Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Assets that are expected to be converted to cash,sold,or used up during the next 12 months,or within the business's normal operating cycle if the cycle is longer than a year,are called ________ assets.

Accepted Answer

A)  intangible 
B)  plant 
C)  long-term 
D)  current 
A)  intangible 
B)  plant 
C)  long-term 
D)  current

Question 3

The Accounts Receivable account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 4

The current ratio is calculated using the values from the income statement.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is NOT a balance sheet account?

Accepted Answer

A)  Unearned Revenue 
B)  Prepaid Rent 
C)  Accumulated Depreciation - Building 
D)  Owner, Withdrawals 
A)  Unearned Revenue 
B)  Prepaid Rent 
C)  Accumulated Depreciation - Building 
D)  Owner, Withdrawals

Question 6

The following contains information from the records of Bourne Engineers and Architects. $$ \begin{array} { c } 
\text { Bourne Engineers and Architects } \
\text { Selected Finarncial Information } \
\text { Decermber 31, 2019 }\
\begin{array} {| l | r| } 
\hline \text { Current Assets } & \$ 70,000 \
\hline \text { Current Liabilities } & 35,000 \
\hline \text { Long-Term Assets } & 97,000\
\hline \text { Long-Term Liabilities } & 63,000\
\hline \text { Total Revenues } & 55,000 \
\hline \text { Total Expenses } & 36,000\
\hline
\end{array}\end{array}$$  Calculate the current ratio.(Round your answer to two decimal places.)

Accepted Answer

A)  1.54 
B)  2.08 
C)  0.56 
D)  2.00 
A)  1.54 
B)  2.08 
C)  0.56 
D)  2.00

Question 7

The financial statements are prepared from the ________.

Accepted Answer

A)  adjusted trial balance 
B)  chart of accounts 
C)  statement of owner's equity 
D)  unadjusted trial balance 
A)  adjusted trial balance 
B)  chart of accounts 
C)  statement of owner's equity 
D)  unadjusted trial balance

Question 8

The Service Revenue account is a temporary account.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

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

Question 10

Prepaid Rent in the worksheet's unadjusted trial balance column is $6,000.Prepaid Rent in the balance sheet column is $4,000.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 credit entry to Rental Revenue 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 credit entry to Rental Revenue in the worksheet's adjustments column

Question 11

The Cash account is a temporary account.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

Which financial statement is prepared last?

Accepted Answer

A)  income statement 
B)  balance sheet 
C)  statement of owner's equity 
D)  The financial statements can be prepared in any order. 
A)  income statement 
B)  balance sheet 
C)  statement of owner's equity 
D)  The financial statements can be prepared in any order.

Question 14

The Martinez,Capital account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 15

The following information is provided for Journey Company and Mastery Company.Both companies provide training materials for electricians.
 $$\begin{array} { | l | c | c | } 
\hline \text { Company } & 2018 & 2019 \
\hline \text { Tourney Company's Current Ratio } & 1.8 & 1.2 \
\hline \text { Mastery Company's Current Ratio } & .8 & 1.4 \
\hline
\end{array}$$ 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 Company has the stron

Question 16

The current ratio shows the profitability of a firm.

Accepted Answer

A) True 
 B)False

Question 17

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 18

The worksheet helps accountants to ________.

Accepted Answer

A)  prepare the trial balance 
B)  prepare the financial statements 
C)  prepare the unadjusted trial balance 
D)  maintain books of accounts without a journal 
A)  prepare the trial balance 
B)  prepare the financial statements 
C)  prepare the unadjusted trial balance 
D)  maintain books of accounts without a journal

Question 19

Which of the following is a current asset that is expected to be converted to cash,sold,or consumed during the next year (or the normal operating cycle,if longer)?

Accepted Answer

A)  Land 
B)  Equipment 
C)  Building 
D)  Accounts Receivable 
A)  Land 
B)  Equipment 
C)  Building 
D)  Accounts Receivable

Question 20

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 Owner, Capital 
C)  debit Owner, Withdrawals 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 Owner, Capital 
C)  debit Owner, Withdrawals and credit Insurance Expense 
D)  debit Income Summary and credit Insurance Expense

Exam 4: Completing the Accounting Cycle

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

Assets that are expected to be converted to cash,sold,or used up during the next 12 months,or within the business's normal operating cycle if the cycle is longer than a year,are called ________ assets.

The Accounts Receivable account is a permanent account.

The current ratio is calculated using the values from the income statement.

Which of the following is NOT a balance sheet account?

The financial statements are prepared from the ________.

The Service Revenue account is a temporary account.

Prepaid Rent in the worksheet's unadjusted trial balance column is $6,000.Prepaid Rent in the balance sheet column is $4,000.Which of the following entries would have caused this difference?

The Cash account is a temporary account.

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

Which financial statement is prepared last?

The Martinez,Capital account is a permanent account.

The current ratio shows the profitability of a firm.

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

The worksheet helps accountants to ________.

Which of the following is a current asset that is expected to be converted to cash,sold,or consumed during the next year (or the normal operating cycle,if longer)?

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

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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