Question 1

Swan Song's adjusted trial balance as of 31 December 2017 is given below:
 
Calculate the current ratio.

Accepted Answer

A)  8.17 
B)  1.73 
C)  2.36 
D)  1.92 
A)  8.17 
B)  1.73 
C)  2.36 
D)  1.92 B

Question 2

Below is a list of various balance sheet accounts and their balances.
$$\begin{array} { | l | l | l | } 
\hline & { \text { Debit } } & \text { Credit } \
\hline \text { Building } & \$ 120,000 & \
\hline \text { Cash } & 10,000 & \
\hline \text { Supplies } & 300 & \
\hline \text { Furniture } & 3000 & \
\hline \text { Prepaid insurance } & 650 & \
\hline \text { Accumulated depreciation - furniture } & & \$ 4000 \
\hline \text { Land } & 33,000 & \
\hline \text { Accumulated depreciation - building } & & 4300 \
\hline \text { Accounts receivable } & 2200 & \
\hline
\end{array}$$
What are the total current assets that would be shown on the balance sheet?

Accepted Answer

A)  $11,450 
B)  $10,800 
C)  $13,650 
D)  $15,200 
A)  $11,450 
B)  $10,800 
C)  $13,650 
D)  $15,200 C

Question 3

Which of the following is NOT a non-current asset?

Accepted Answer

A)  Accounts receivable 
B)  Equipment 
C)  Land 
D)  Buildings 
A)  Accounts receivable 
B)  Equipment 
C)  Land 
D)  Buildings A

Question 4

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

Accepted Answer

A)  Assets, liabilities and capital 
B)  Revenues, expenses and capital 
C)  Revenues, expenses and drawings 
D)  Assets, liabilities and drawings 
A)  Assets, liabilities and capital 
B)  Revenues, expenses and capital 
C)  Revenues, expenses and drawings 
D)  Assets, liabilities and drawings

Question 5

An increase in the current ratio implies that the profitability of the company has increased from the previous period.

Accepted Answer

A) True 
 B)False

Question 6

The Drawings account is copied to the Income statement columns on the worksheet.

Accepted Answer

A) True 
 B)False

Question 7

Where does Profit appear on a worksheet?

Accepted Answer

A)  Profit appears only in the Income statement debit column. 
B)  Profit appears in the Income statement credit column and in the balance sheet debit column. 
C)  Profit appears in the balance sheet credit column and in the Income statement debit column. 
D)  Profit appears only in the balance sheet credit column. 
A)  Profit appears only in the Income statement debit column. 
B)  Profit appears in the Income statement credit column and in the balance sheet debit column. 
C)  Profit appears in the balance sheet credit column and in the Income statement debit column. 
D)  Profit appears only in the balance sheet credit column.

Question 8

Capital is a permanent account.

Accepted Answer

A) True 
 B)False

Question 9

The following contains information from the records of the Wellborn Engineers and Architects.
Wellborn Engineers and Architects
Selected financial information
31 December 2016
$$\begin{array} { | l | l | } 
\hline \text { Current assets } & \$ 80,000 \
\hline \text { Current liabilities } & 42,000 \
\hline \text { Non-current assets } & 97,000 \
\hline \text { Non-current liabilities } & 64,000 \
\hline \text { Total revenues } & 53,000 \
\hline \text { Total expenses } & 34,000 \
\hline
\end{array}$$
Calculate the current ratio.

Accepted Answer

A)  1.9 
B)  0.6 
C)  1.52 
D)  2.23 
A)  1.9 
B)  0.6 
C)  1.52 
D)  2.23

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

John Smith is the owner of Alpha Technologies Ltd.The beginning balance in Smith,capital was $90 000.The revenues and expenses were $70 000 and $50 000,respectively.If no drawings were made by Smith during the year,the ending balance in Smith,Capital must be $100 000.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following accounts will still show a balance after the closing process is completed?

Accepted Answer

A)  Service revenue account 
B)  Expense accounts 
C)  Accumulated depreciation account 
D)  Drawings account 
A)  Service revenue account 
B)  Expense accounts 
C)  Accumulated depreciation account 
D)  Drawings account

Question 13

Which of the following does the debt ratio measure?

Accepted Answer

A)  The proportion of the company's assets that are financed with equity 
B)  The company's ability to invest in growth 
C)  The company's overall ability to pay its liabilities 
D)  The company's ability to pay current liabilities with current assets 
A)  The proportion of the company's assets that are financed with equity 
B)  The company's ability to invest in growth 
C)  The company's overall ability to pay its liabilities 
D)  The company's ability to pay current liabilities with current assets

Question 14

Adkins Company has a current ratio of 1.0 and a debt ratio of 0.7.Wilson Company has a current ratio of 1.4 and a debt ratio of 0.5.Both companies are in the same industry.Which of the following statements is TRUE?

Accepted Answer

A)  The two companies' debt ratios and current ratios vary in different directions, and the companies appear to be in similar financial shape. 
B)  The two companies' debt ratios and current ratios vary in different directions, and these results do not make sense. 
C)  Wilson Company appears to be in better financial shape than Adkins Company. 
D)  Adkins Company appears to be in better financial shape than Wilson Company. 
A)  The two companies' debt ratios and current ratios vary in different directions, and the companies appear to be in similar financial shape. 
B)  The two companies' debt ratios and current ratios vary in different directions, and these results do not make sense. 
C)  Wilson Company appears to be in better financial shape than Adkins Company. 
D)  Adkins Company appears to be in better financial shape than Wilson Company.

Question 15

Assets and liabilities are classified as either current or non-current to show their relative liquidity.

Accepted Answer

A) True 
 B)False

Question 16

Where can closing entries be found?

Accepted Answer

A)  In a company's general journal 
B)  On a company's worksheet 
C)  On a company's statement of changes in equity 
D)  On a company's balance sheet 
A)  In a company's general journal 
B)  On a company's worksheet 
C)  On a company's statement of changes in equity 
D)  On a company's balance sheet

Question 17

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

Accepted Answer

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

Question 18

In which of the columns of the worksheet would Profit be found?

Accepted Answer

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

Question 19

Drawings is a permanent account.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

Accepted Answer

A)  Equipment 
B)  Salary payable 
C)  Insurance expense 
D)  Rent revenue 
A)  Equipment 
B)  Salary payable 
C)  Insurance expense 
D)  Rent revenue

Exam 4: Completing the Accounting Cycle

Swan Song's adjusted trial balance as of 31 December 2017 is given below: Calculate the current ratio.

Which of the following is NOT a non-current asset?

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

An increase in the current ratio implies that the profitability of the company has increased from the previous period.

The Drawings account is copied to the Income statement columns on the worksheet.

Where does Profit appear on a worksheet?

Capital is a permanent account.

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

John Smith is the owner of Alpha Technologies Ltd.The beginning balance in Smith,capital was $90 000.The revenues and expenses were $70 000 and $50 000,respectively.If no drawings were made by Smith during the year,the ending balance in Smith,Capital must be $100 000.

Which of the following accounts will still show a balance after the closing process is completed?

Which of the following does the debt ratio measure?

Adkins Company has a current ratio of 1.0 and a debt ratio of 0.7.Wilson Company has a current ratio of 1.4 and a debt ratio of 0.5.Both companies are in the same industry.Which of the following statements is TRUE?

Assets and liabilities are classified as either current or non-current to show their relative liquidity.

Where can closing entries be found?

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

In which of the columns of the worksheet would Profit be found?

Drawings is a permanent account.

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities,debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

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