Question 1

Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

Accepted Answer

A) True 
 B)False

Question 2

Reversing entries are linked to ____________________ and _____________ that were created by adjusting entries at the end of the prior accounting period.

Accepted Answer

Accrued as

Question 3

Current liabilities include accounts receivable, unearned revenues, and salaries payable.

Accepted Answer

A) True 
 B)False

Question 4

Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the prior accounting period.

Accepted Answer

A) True 
 B)False

Question 5

Explain why temporary accounts are closed each period.

Accepted Answer

Temporary accounts are closed at the end

Question 6

The current ratio is used to help assess a company's ability to pay its debts in the near future.

Accepted Answer

A) True 
 B)False

Question 7

Based on the following information from Raptor Company's balance sheet, calculate the current ratio.

Accepted Answer

A)  .44. 
B)  3.51. 
C)  3.33. 
D)  1.06. 
E)  2.23. 
A)  .44. 
B)  3.51. 
C)  3.33. 
D)  1.06. 
E)  2.23.

Question 8

Listed below are a number of accounts. Use the table below to classify each account. Indicate whether it is a temporary or permanent account, whether it is included in the Income Statement or Balance sheet, and if it is closed at the end of the accounting period, and, if so, how it is closed. The first one is done as an example.

Accepted Answer

The answer of Listed below are a number of accounts....

Question 9

The following items appeared on a company's December 31 work sheet for the current period. Based on the following information, what is the net income for the current period?

Accepted Answer

A)  $1,400. 
B)  $1,855. 
C)  $1,905. 
D)  $2,060. 
E)  $4,670. 
A)  $1,400. 
B)  $1,855. 
C)  $1,905. 
D)  $2,060. 
E)  $4,670.

Question 10

All of the following regarding current ratio are except:

Accepted Answer

A)  Current ratio is calculated by dividing current assets by current liabilities. 
B)  Current ratio helps to assess a company's ability to pay its debts in the near future. 
C)  Current ratio does not affect a creditor's decision on when to allow a company to buy on credit. 
D)  Current ratio can affect a creditor's decision about whether to lend money to a company. 
E)  Current ratio can reveal problems in a company if it is less than 1. 
A)  Current ratio is calculated by dividing current assets by current liabilities. 
B)  Current ratio helps to assess a company's ability to pay its debts in the near future. 
C)  Current ratio does not affect a creditor's decision on when to allow a company to buy on credit. 
D)  Current ratio can affect a creditor's decision about whether to lend money to a company. 
E)  Current ratio can reveal problems in a company if it is less than 1.

Question 11

Compute Dave Company's current ratio using the following information:

Accepted Answer

($20,000+$

Question 12

Which of the following is the usual final step in the accounting cycle?

Accepted Answer

A)  Journalizing transactions. 
B)  Preparing an adjusted trial balance. 
C)  Preparing a post-closing trial balance. 
D)  Preparing the financial statements. 
E)  Preparing a work sheet. 
A)  Journalizing transactions. 
B)  Preparing an adjusted trial balance. 
C)  Preparing a post-closing trial balance. 
D)  Preparing the financial statements. 
E)  Preparing a work sheet.

Question 13

Adjusting entries are normally entered in the general journal before they are posted to the work sheet.

Accepted Answer

A) True 
 B)False

Question 14

Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:

Accepted Answer

A)  Real accounts. 
B)  Temporary accounts. 
C)  Closing accounts. 
D)  Permanent accounts. 
E)  Balance sheet accounts. 
A)  Real accounts. 
B)  Temporary accounts. 
C)  Closing accounts. 
D)  Permanent accounts. 
E)  Balance sheet accounts.

Question 15

Reversing entries:

Accepted Answer

A)  are necessary when journal entries have been incorrectly recorded. 
B)  are a required step in the accounting cycle. 
C)  will often result in abnormal account balances in some accounts. 
D)  are required only if the company uses accounting software to record journal entries. 
E)  must be made before preparing the post-closing trial balance. 
A)  are necessary when journal entries have been incorrectly recorded. 
B)  are a required step in the accounting cycle. 
C)  will often result in abnormal account balances in some accounts. 
D)  are required only if the company uses accounting software to record journal entries. 
E)  must be made before preparing the post-closing trial balance.

Question 16

Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

Accepted Answer

A)  Adjusting entries. 
B)  Closing entries. 
C)  Final entries. 
D)  Work sheet entries. 
E)  Updating entries. 
A)  Adjusting entries. 
B)  Closing entries. 
C)  Final entries. 
D)  Work sheet entries. 
E)  Updating entries.

Question 17

A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.

Accepted Answer

A) True 
 B)False

Question 18

The work sheet is a required report.

Accepted Answer

A) True 
 B)False

Question 19

If the Balance Sheet and Statement of Changes in Equity columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet and Statement of Changes in Equity Credit column, the cause could be:

Accepted Answer

A)  An expense amount entered in the Balance Sheet and Statement of Changes in Equity Debit column. 
B)  A revenue amount entered in the Balance Sheet and Statement of Changes in Equity Credit column. 
C)  An asset amount entered in the Income Statement and Statement of Changes in Equity Debit column. 
D)  A liability amount entered in the Income Statement and Statement of Changes in Equity Credit column. 
E)  An expense amount entered in the Balance Sheet and Statement of Changes in Equity Credit column. 
A)  An expense amount entered in the Balance Sheet and Statement of Changes in Equity Debit column. 
B)  A revenue amount entered in the Balance Sheet and Statement of Changes in Equity Credit column. 
C)  An asset amount entered in the Income Statement and Statement of Changes in Equity Debit column. 
D)  A liability amount entered in the Income Statement and Statement of Changes in Equity Credit column. 
E)  An expense amount entered in the Balance Sheet and Statement of Changes in Equity Credit column.

Question 20

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Accepted Answer

A)  Office Equipment. 
B)  Accumulated Depreciation-Office Equipment. 
C)  Depreciation Expense-Office Equipment. 
D)  Ted Nash, Capital. 
E)  Salaries Payable. 
A)  Office Equipment. 
B)  Accumulated Depreciation-Office Equipment. 
C)  Depreciation Expense-Office Equipment. 
D)  Ted Nash, Capital. 
E)  Salaries Payable.

Exam 4: Completing the Accounting Cycle

Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

Reversing entries are linked to ____________________ and _____________ that were created by adjusting entries at the end of the prior accounting period.

Current liabilities include accounts receivable, unearned revenues, and salaries payable.

Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the prior accounting period.

Explain why temporary accounts are closed each period.

The current ratio is used to help assess a company's ability to pay its debts in the near future.

Based on the following information from Raptor Company's balance sheet, calculate the current ratio.

The following items appeared on a company's December 31 work sheet for the current period. Based on the following information, what is the net income for the current period?

All of the following regarding current ratio are except:

Compute Dave Company's current ratio using the following information:

Which of the following is the usual final step in the accounting cycle?

Adjusting entries are normally entered in the general journal before they are posted to the work sheet.

Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:

Reversing entries:

Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.

The work sheet is a required report.

If the Balance Sheet and Statement of Changes in Equity columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet and Statement of Changes in Equity Credit column, the cause could be:

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

Reversing entries are linked to ________ and _ that were created by adjusting entries at the end of the prior accounting period.