Question 1

Which of the following statements is an accurate interpretation of a debt ratio of 0.60?

Accepted Answer

A)  The company has $0.60 of current assets for every $1.00 of current liabilities. 
B)  The company has $0.60 of current liabilities for every $1.00 of current assets. 
C)  The company has $0.60 of assets for every $1.00 of liabilities. 
D)  The company has $0.60 of liabilities for every $1.00 of assets. 
A)  The company has $0.60 of current assets for every $1.00 of current liabilities. 
B)  The company has $0.60 of current liabilities for every $1.00 of current assets. 
C)  The company has $0.60 of assets for every $1.00 of liabilities. 
D)  The company has $0.60 of liabilities for every $1.00 of assets.

Question 2

The current ratio and the debt ratio are shown on the Income statement.

Accepted Answer

A) True 
 B)False

Question 3

The following contains information from the records of the Wellborn Engineers and Architects.
Wellborn Engineers and Architects
Selected financial information
31 December,2016
$$\begin{array} { | l | l | } 
\hline \text { Current assets } & \$ 70,000 \
\hline \text { Current liabilities } & 35,000 \
\hline \text { Non-current assets } & 99,000 \
\hline \text { Non-current liabilities } & 62,000 \
\hline \text { Total revenues } & 53,000 \
\hline \text { Total expenses } & 37,000 \
\hline
\end{array}$$
Which of the following statements is an accurate interpretation of the current ratio of Wellborn Engineers and Architects?

Accepted Answer

A)  The company has $2.00 of current assets for every $1.00 of current liabilities. 
B)  The company has $0.57 of current assets for every $1.00 of current liabilities. 
C)  The company has $2.13 of current assets for every $1.00 of liabilities. 
D)  The company has $1.60 of current assets for every $1.00 of liabilities. 
A)  The company has $2.00 of current assets for every $1.00 of current liabilities. 
B)  The company has $0.57 of current assets for every $1.00 of current liabilities. 
C)  The company has $2.13 of current assets for every $1.00 of liabilities. 
D)  The company has $1.60 of current assets for every $1.00 of liabilities.

Question 4

The post-closing trial balance is an optional step.

Accepted Answer

A) True 
 B)False

Question 5

A list of the accounts and their balances at the end of the period after journalising and posting the closing entries which includes only permanent accounts is called:

Accepted Answer

A)  post-closing trial balance. 
B)  pre-closing balance sheet. 
C)  chart of accounts. 
D)  adjusted trial balance. 
A)  post-closing trial balance. 
B)  pre-closing balance sheet. 
C)  chart of accounts. 
D)  adjusted trial balance.

Question 6

Which of the following is considered a good/safe rule-of-thumb debt ratio for businesses?

Accepted Answer

A)  0.8 or below 
B)  0.6 or below 
C)  1.0 or above 
D)  1.5 or above 
A)  0.8 or below 
B)  0.6 or below 
C)  1.0 or above 
D)  1.5 or above

Question 7

The following contains information from the records of the Wellborn Engineers and Architects.
Wellborn Engineers and Architects
Selected financial information
31 December 2017
$$\begin{array} { | l | l | } 
\hline \text { Current assets } & \$ 77000 \
\hline \text { Current liabilities } & 47000 \
\hline \text { Non-current assets } & 9 8000 \
\hline \text { Non-current liabilities } & 63000 \
\hline \text { Total revenues } & 53000 \
\hline \text { Total expenses } & 33000 \
\hline
\end{array}$$
What is the debt ratio?

Accepted Answer

A)  3.84 
B)  1.63 
C)  0.63 
D)  1.67 
A)  3.84 
B)  1.63 
C)  0.63 
D)  1.67

Question 8

Under which of the following categories would Inventory appear?

Accepted Answer

A)  Non-current assets 
B)  Non-current liabilities 
C)  Current assets 
D)  Current liabilities 
A)  Non-current assets 
B)  Non-current liabilities 
C)  Current assets 
D)  Current liabilities

Question 9

The current ratio is a measure of a company's:

Accepted Answer

A)  leverage. 
B)  solvency. 
C)  profitability. 
D)  liquidity. 
A)  leverage. 
B)  solvency. 
C)  profitability. 
D)  liquidity.

Question 10

Which of the following statements is TRUE concerning the worksheet?

Accepted Answer

A)  The worksheet is a document used to summarise data to prepare the financial statements. 
B)  The worksheet is a ledger. 
C)  The worksheet is a journal. 
D)  The worksheet is a financial statement. 
A)  The worksheet is a document used to summarise data to prepare the financial statements. 
B)  The worksheet is a ledger. 
C)  The worksheet is a journal. 
D)  The worksheet is a financial statement.

Question 11

The smaller the current ratio,the higher is the ability of a firm to repay its current debts.

Accepted Answer

A) True 
 B)False

Question 12

The worksheet helps accountants to:

Accepted Answer

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

Question 13

A company has $140,000 in current assets; $600,000 in total assets; $80,000 in current liabilities,and$120,000 in total liabilities.The company has a current ratio of:

Accepted Answer

A)  1.76 
B)  1.17 
C)  1.57 
D)  1.75 
A)  1.76 
B)  1.17 
C)  1.57 
D)  1.75

Question 14

The Net profit of Sarah for the year is $40,000.The withdrawals Sarah made during the year amounted to $51,000.Which of the following statements is true of the effect of these transactions on Sarah,capital?

Accepted Answer

A)  Sarah, capital account decreases by $40,000. 
B)  Sarah, capital account increases by $51,000. 
C)  Sarah, capital account decreases by $11,000. 
D)  Sarah, capital account increases by $40,000. 
A)  Sarah, capital account decreases by $40,000. 
B)  Sarah, capital account increases by $51,000. 
C)  Sarah, capital account decreases by $11,000. 
D)  Sarah, capital account increases by $40,000.

Question 15

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

Accepted Answer

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

Question 16

Which of the following is the LAST step of preparing the worksheet?

Accepted Answer

A)  Enter the adjusting entries in the adjustments columns, and total the amounts. 
B)  On the Income statement column, calculate profit. Enter profit or loss as the balancing amount on the Income statement and balance sheet columns. Total the Income statement and balance sheet columns. 
C)  Copy the asset, liability and owners' equity amounts from the adjusted trial balance to the balance sheet columns. Copy the revenue and expense amounts to the Income statement columns. Total each column. 
D)  Calculate each account's adjusted balance by combining the trial balance and adjustment figures. Enter each account's adjusted amount in the adjusted trial balance columns. 
A)  Enter the adjusting entries in the adjustments columns, and total the amounts. 
B)  On the Income statement column, calculate profit. Enter profit or loss as the balancing amount on the Income statement and balance sheet columns. Total the Income statement and balance sheet columns. 
C)  Copy the asset, liability and owners' equity amounts from the adjusted trial balance to the balance sheet columns. Copy the revenue and expense amounts to the Income statement columns. Total each column. 
D)  Calculate each account's adjusted balance by combining the trial balance and adjustment figures. Enter each account's adjusted amount in the adjusted trial balance columns.

Question 17

Please refer to the worksheet below.   How much was the Profit?

Accepted Answer

A)  $13 600 
B)  $42 000 
C)  $22 020 
D)  $28 400 
A)  $13 600 
B)  $42 000 
C)  $22 020 
D)  $28 400

Question 18

As part of the closing process,revenues and expenses are closed to a temporary account called Profit (loss).

Accepted Answer

A) True 
 B)False

Question 19

What is the key distinction between current and non-current liabilities?

Accepted Answer

A)  Current liabilities always have lower balances than non-current liabilities. 
B)  Non-current liabilities always increase over time. 
C)  Non-current liabilities are permanent debts of the business. 
D)  Current liabilities will be paid off within one year or one operating cycle. 
A)  Current liabilities always have lower balances than non-current liabilities. 
B)  Non-current liabilities always increase over time. 
C)  Non-current liabilities are permanent debts of the business. 
D)  Current liabilities will be paid off within one year or one operating cycle.

Question 20

The adjusting process zeroes out all revenues and all expenses.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

Which of the following statements is an accurate interpretation of a debt ratio of 0.60?

The current ratio and the debt ratio are shown on the Income statement.

The post-closing trial balance is an optional step.

A list of the accounts and their balances at the end of the period after journalising and posting the closing entries which includes only permanent accounts is called:

Which of the following is considered a good/safe rule-of-thumb debt ratio for businesses?

Under which of the following categories would Inventory appear?

The current ratio is a measure of a company's:

Which of the following statements is TRUE concerning the worksheet?

The smaller the current ratio,the higher is the ability of a firm to repay its current debts.

The worksheet helps accountants to:

A company has $140,000 in current assets; $600,000 in total assets; $80,000 in current liabilities,and$120,000 in total liabilities.The company has a current ratio of:

The Net profit of Sarah for the year is $40,000.The withdrawals Sarah made during the year amounted to $51,000.Which of the following statements is true of the effect of these transactions on Sarah,capital?

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

Which of the following is the LAST step of preparing the worksheet?

Please refer to the worksheet below. How much was the Profit?

As part of the closing process,revenues and expenses are closed to a temporary account called Profit (loss).

What is the key distinction between current and non-current liabilities?

The adjusting process zeroes out all revenues and all expenses.

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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