Question 1

Regarding a classified balance sheet,which of the following statements regarding liabilities is incorrect?

Accepted Answer

A) Many Notes Payable are long-term. 
B) Current liabilities include Accounts Payable and Unearned Revenue. 
C) Long-term liabilities must be paid either with cash or with goods and services within one year or the entity's operating cycle,if the cycle is longer than one year. 
D) Liabilities are listed in the order in which they must be paid 
A) Many Notes Payable are long-term. 
B) Current liabilities include Accounts Payable and Unearned Revenue. 
C) Long-term liabilities must be paid either with cash or with goods and services within one year or the entity's operating cycle,if the cycle is longer than one year. 
D) Liabilities are listed in the order in which they must be paid

Question 2

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 3

If a business has a net loss,the closing entry to close Income Summary would be a debit to Income Summary and a credit to Owner,Capital.The business is a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Which of the following would be considered the weakest current ratio?

Accepted Answer

A) 0.35 
B) 1.00 
C) 1.25 
D) 2.50 
A) 0.35 
B) 1.00 
C) 1.25 
D) 2.50

Question 6

Liquidity is a measure of how ________.

Accepted Answer

A) quickly an asset may be converted into cash 
B) long an asset can be used 
C) easily an asset can be exchanged for another asset 
D) quickly an asset appreciates in value 
A) quickly an asset may be converted into cash 
B) long an asset can be used 
C) easily an asset can be exchanged for another asset 
D) quickly an asset appreciates in value

Question 7

Which of the following would be considered a long-term asset?

Accepted Answer

A) Accounts Payable 
B) Land 
C) Office Supplies 
D) Owner,Capital 
A) Accounts Payable 
B) Land 
C) Office Supplies 
D) Owner,Capital

Question 8

When preparing a worksheet,net income is recorded in the ________.

Accepted Answer

A) income statement credit column 
B) adjusted trial balance debit column 
C) income statement debit column 
D) balance sheet debit column 
A) income statement credit column 
B) adjusted trial balance debit column 
C) income statement debit column 
D) balance sheet debit column

Question 9

The Salaries Expense account is a temporary account.

Accepted Answer

A) True 
 B)False

Question 10

The net income of Hendley Company for the year is $25,000.Withdrawals during the year were $30,000.No new capital contributions were made during the year.Which of the following statements is TRUE?

Accepted Answer

A) Hendley,Capital account decreases by $25,000. 
B) Hendley,Capital account decreases by $5,000. 
C) Hendley,Capital account increases by $30,000. 
D) Hendley,Capital will remain the same. 
A) Hendley,Capital account decreases by $25,000. 
B) Hendley,Capital account decreases by $5,000. 
C) Hendley,Capital account increases by $30,000. 
D) Hendley,Capital will remain the same.

Question 11

A worksheet can be used to help prepare the financial statements.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

If a business has a net loss,the Income Summary T account would hold a debit balance before the account is closed.

Accepted Answer

A) True 
 B)False

Question 16

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 17

To make sure that an error was not made in the closing process,compare the Adjusted Trial Balance to the Post-Closing Trial Balance.List the three items that need to be considered in order to complete the step.

Accepted Answer

1.Account balances above Owner,Capital a

Question 18

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

Accepted Answer

A) Service Revenue 
B) Depreciation Expense 
C) Accounts Payable 
D) Accumulated Depreciation 
A) Service Revenue 
B) Depreciation Expense 
C) Accounts Payable 
D) Accumulated Depreciation

Question 19

The current ratio measures ________.

Accepted Answer

A) a company's ability to sell its long-term assets 
B) a company's ability to pay current liabilities from its total assets 
C) a company's ability to pay current liabilities from current assets 
D) a company's profitability during a particular period 
A) a company's ability to sell its long-term assets 
B) a company's ability to pay current liabilities from its total assets 
C) a company's ability to pay current liabilities from current assets 
D) a company's profitability during a particular period

Question 20

What is the net result if the amount of net income for the year is less than the amount of the owner's withdrawals?

Accepted Answer

A) Owner,Capital increases 
B) Cash balance decreases 
C) Cash balance increases 
D) Owner,Capital decreases 
A) Owner,Capital increases 
B) Cash balance decreases 
C) Cash balance increases 
D) Owner,Capital decreases

Regarding a classified balance sheet,which of the following statements regarding liabilities is incorrect?

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?

If a business has a net loss,the closing entry to close Income Summary would be a debit to Income Summary and a credit to Owner,Capital.The business is a sole proprietorship.

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 would be considered the weakest current ratio?

Liquidity is a measure of how ________.

Which of the following would be considered a long-term asset?

When preparing a worksheet,net income is recorded in the ________.

The Salaries Expense account is a temporary account.

The net income of Hendley Company for the year is $25,000.Withdrawals during the year were $30,000.No new capital contributions were made during the year.Which of the following statements is TRUE?

A worksheet can be used to help prepare the financial statements.

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

Reversing entries are ________.

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.

If a business has a net loss,the Income Summary T account would hold a debit balance before the account is closed.

Property,plant,and equipment are ________.

To make sure that an error was not made in the closing process,compare the Adjusted Trial Balance to the Post-Closing Trial Balance.List the three items that need to be considered in order to complete the step.

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

The current ratio measures ________.

What is the net result if the amount of net income for the year is less than the amount of the owner's withdrawals?

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

Filters

Exam 4: Completing the Accounting Cycle

Regarding a classified balance sheet,which of the following statements regarding liabilities is incorrect?

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?

If a business has a net loss,the closing entry to close Income Summary would be a debit to Income Summary and a credit to Owner,Capital.The business is a sole proprietorship.

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 would be considered the weakest current ratio?

Liquidity is a measure of how ________.

Which of the following would be considered a long-term asset?

When preparing a worksheet,net income is recorded in the ________.

The Salaries Expense account is a temporary account.

The net income of Hendley Company for the year is $25,000.Withdrawals during the year were $30,000.No new capital contributions were made during the year.Which of the following statements is TRUE?

A worksheet can be used to help prepare the financial statements.

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

Reversing entries are ________.

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.

If a business has a net loss,the Income Summary T account would hold a debit balance before the account is closed.

Property,plant,and equipment are ________.

To make sure that an error was not made in the closing process,compare the Adjusted Trial Balance to the Post-Closing Trial Balance.List the three items that need to be considered in order to complete the step.

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

The current ratio measures ________.

What is the net result if the amount of net income for the year is less than the amount of the owner's withdrawals?

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

Filters