Question 1

The income summary account is also known as the clearing account.

Accepted Answer

A) True 
 B)False

Question 2

Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.

Accepted Answer

A) True 
 B)False

Question 3

Capital and Drawing are reported in the owner's equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

After Net Income or Loss is entered on the work sheet, the debit column total must equal the credit column total for the Balance Sheet pair of columns.

Accepted Answer

A) True 
 B)False

Question 5

The following is the adjusted trial balance for Nadia Company.
   Prepare an Income Statement, Balance Sheet, and Statement of Owner's Equity. Assume that the capital account started with a beginning balance of $10,000.

Accepted Answer

@#IMG-DLM&_TB2013_00

Question 6

The drawing account is closed to the income summary account.

Accepted Answer

A) True 
 B)False

Question 7

Unearned Fees appear on the

Accepted Answer

A)  balance sheet in the current assets section 
B)  balance sheet as a current liability 
C)  balance sheet in the owner's equity section 
D)  income statement as revenue 
A)  balance sheet in the current assets section 
B)  balance sheet as a current liability 
C)  balance sheet in the owner's equity section 
D)  income statement as revenue

Question 8

The post-closing trial balance will generally have fewer accounts than the trial balance.

Accepted Answer

A) True 
 B)False

Question 9

Net income is shown on the work sheet in the Income Statement debit column and the Balance Sheet credit column.

Accepted Answer

A) True 
 B)False

Question 10

After net income is entered on the work sheet, the Balance Sheet debit and credit columns must

Accepted Answer

A)  be the same amount as the total amount of the Income Statement debit and credit columns 
B)  equal each other 
C)  be the same amount as the total amount in the Adjusted Trial Balance debit and credit columns 
D)  not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet 
A)  be the same amount as the total amount of the Income Statement debit and credit columns 
B)  equal each other 
C)  be the same amount as the total amount in the Adjusted Trial Balance debit and credit columns 
D)  not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet

Question 11

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

Accepted Answer

A)  Supplies Expense 
B)  Accumulated Depreciation 
C)  Prepaid Insurance 
D)  Unearned Rent 
A)  Supplies Expense 
B)  Accumulated Depreciation 
C)  Prepaid Insurance 
D)  Unearned Rent

Question 12

Accrued expenses are ordinarily listed on the balance sheet as current assets.

Accepted Answer

A) True 
 B)False

Question 13

Cross-referencing is useful in assuring that the debits and credits are in balance.

Accepted Answer

A) True 
 B)False

Question 14

You have just accepted your first job out of college, which requires you to evaluate loan requests at Beach Front National Bank. The first loan request you receive is from Surfer Dude Enterprises, a small proprietorship. Marty Monroe, the owner, is requesting $75,000 and brings you the following trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010.
Which of the following accounts do you think might need to be adjusted before an accurate set of financial statements could be prepared?

Accepted Answer

The following adjustments migh

Question 15

Explain how net income or loss is determined by using the work sheet.

Accepted Answer

The difference between the debits and cr

Question 16

Owner's Equity is

Accepted Answer

A)  added to assets and the two are equal to liabilities 
B)  added to liabilities and the two are equal to assets 
C)  subtracted from liabilities and the net amount is equal to assets 
D)  equal to the total of assets and liabilities 
A)  added to assets and the two are equal to liabilities 
B)  added to liabilities and the two are equal to assets 
C)  subtracted from liabilities and the net amount is equal to assets 
D)  equal to the total of assets and liabilities

Question 17

The proper sequence of steps in the accounting cycle is as follows

Accepted Answer

A)  analyze and record transactions, post transaction to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries 
B)  prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger 
C)  analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and finally prepare a post-closing trial balance 
D)  prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries 
A)  analyze and record transactions, post transaction to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries 
B)  prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger 
C)  analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and finally prepare a post-closing trial balance 
D)  prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries

Question 18

The fiscal year selected by companies

Accepted Answer

A)  is the same as the calendar year 
B)  begins with the first day of the month and ends on the last day of the twelfth month 
C)  must always begin on January 1 
D)  will change each year 
A)  is the same as the calendar year 
B)  begins with the first day of the month and ends on the last day of the twelfth month 
C)  must always begin on January 1 
D)  will change each year

Question 19

The Statement of Owner's Equity begins with the beginning balance followed by

Accepted Answer

A)  plus Net Income (loss) less withdrawals 
B)  plus Net Income (loss) plus investments 
C)  plus investments less withdrawals 
D)  plus investments plus Net Income (loss) less withdrawals 
A)  plus Net Income (loss) less withdrawals 
B)  plus Net Income (loss) plus investments 
C)  plus investments less withdrawals 
D)  plus investments plus Net Income (loss) less withdrawals

Question 20

Accumulated Depreciation is a permanent account.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

The income summary account is also known as the clearing account.

Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.

Capital and Drawing are reported in the owner's equity section of the balance sheet.

After Net Income or Loss is entered on the work sheet, the debit column total must equal the credit column total for the Balance Sheet pair of columns.

The following is the adjusted trial balance for Nadia Company. Prepare an Income Statement, Balance Sheet, and Statement of Owner's Equity. Assume that the capital account started with a beginning balance of $10,000.

The drawing account is closed to the income summary account.

Unearned Fees appear on the

The post-closing trial balance will generally have fewer accounts than the trial balance.

Net income is shown on the work sheet in the Income Statement debit column and the Balance Sheet credit column.

After net income is entered on the work sheet, the Balance Sheet debit and credit columns must

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

Accrued expenses are ordinarily listed on the balance sheet as current assets.

Cross-referencing is useful in assuring that the debits and credits are in balance.

Explain how net income or loss is determined by using the work sheet.

Owner's Equity is

The proper sequence of steps in the accounting cycle is as follows

The fiscal year selected by companies

The Statement of Owner's Equity begins with the beginning balance followed by

Accumulated Depreciation is a permanent account.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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