Question 1

Measures of profitability tell us how quickly current assets can be converted into profits.

Accepted Answer

A) True 
 B)False

Question 2

A debit balance in the income summary account indicates:

Accepted Answer

A) An error was made. 
B) A Net Profit. 
C) A Net Loss. 
D) The closing process is incomplete. 
A) An error was made. 
B) A Net Profit. 
C) A Net Loss. 
D) The closing process is incomplete.

Question 3

The Income Summary account has debits of $85,000 and credits of $75,000.The company had which of the following:

Accepted Answer

A) Net income of $10,000. 
B) Net income of $160,000. 
C) Net loss of $10,000. 
D) Net loss of $160,000. 
A) Net income of $10,000. 
B) Net income of $160,000. 
C) Net loss of $10,000. 
D) Net loss of $160,000.

Question 4

Of the following,which is not an alternative title for the income statement?

Accepted Answer

A) Earnings statement. 
B) Statement of Operations. 
C) Profit and Loss Statement. 
D) Statement of Financial Position. 
A) Earnings statement. 
B) Statement of Operations. 
C) Profit and Loss Statement. 
D) Statement of Financial Position.

Question 5

Which of the following accounts should not be closed?

Accepted Answer

A) Expenses and revenues. 
B) Dividends. 
C) Income summary. 
D) Accumulated depreciation. 
A) Expenses and revenues. 
B) Dividends. 
C) Income summary. 
D) Accumulated depreciation.

Question 6

If current assets are $180,000 and current liabilities are $130,000,working capital will be:

Accepted Answer

A) 72%. 
B) $50,000. 
C) 1.4. 
D) $310,000. 
A) 72%. 
B) $50,000. 
C) 1.4. 
D) $310,000.

Question 7

The report form of the balance sheet lists liabilities and owners' equity below assets.

Accepted Answer

A) True 
 B)False

Question 8

Publicly owned companies must file their audited financial statements and detailed supporting schedules with the Financial Accounting Standards Board.

Accepted Answer

A) True 
 B)False

Question 9

IFRS 1 requires that management and auditors should depart from compliance with GAAP if it is necessary to achieve a fair presentation when reporting financial results.

Accepted Answer

A) True 
 B)False

Question 10

The dividends account should be:

Accepted Answer

A) Closed to income summary. 
B) Closed to retained earnings. 
C) Closed only if there is a profit. 
D) Not closed at all. 
A) Closed to income summary. 
B) Closed to retained earnings. 
C) Closed only if there is a profit. 
D) Not closed at all.

Question 11

If sales are $540,000,expenses are $440,000 and dividends are $50,000,Income Summary:

Accepted Answer

A) Will have a credit balance of $50,000. 
B) Will have a debit balance of $50,000. 
C) Will have a debit balance of $100,000. 
D) Will have a credit balance of $100,000. 
A) Will have a credit balance of $50,000. 
B) Will have a debit balance of $50,000. 
C) Will have a debit balance of $100,000. 
D) Will have a credit balance of $100,000.

Question 12

When a worksheet is used:

Accepted Answer

A) Adjusting entries are not prepared,since adjustments are shown on the worksheet. 
B) Revenue and expense accounts do not have to be closed to the Income Summary account,because the income statement is prepared from the worksheet and net income is already computed. 
C) Financial statements may be prepared before recording adjusting and closing entries in the accounting records. 
D) The Income Statement column and Balance Sheet column of the worksheet eliminate the need to prepare formal financial statements for a business. 
A) Adjusting entries are not prepared,since adjustments are shown on the worksheet. 
B) Revenue and expense accounts do not have to be closed to the Income Summary account,because the income statement is prepared from the worksheet and net income is already computed. 
C) Financial statements may be prepared before recording adjusting and closing entries in the accounting records. 
D) The Income Statement column and Balance Sheet column of the worksheet eliminate the need to prepare formal financial statements for a business.

Question 13

The current ratio is a measure of short-term debt paying ability.

Accepted Answer

A) True 
 B)False

Question 14

The total debits in the After-Closing Trial Balance will equal:

Accepted Answer

A) $25,375. 
B) $29,125. 
C) $40,875. 
D) $18,125. 
A) $25,375. 
B) $29,125. 
C) $40,875. 
D) $18,125.

Question 15

Preparation of interim financial statements:

Accepted Answer

A) Makes the preparation of year-end financial statements unnecessary. 
B) Requires the journalizing and posting of adjusting entries. 
C) Requires the journalizing and posting of closing entries. 
D) Is done monthly or quarterly or in-between the year-end financial statements. 
A) Makes the preparation of year-end financial statements unnecessary. 
B) Requires the journalizing and posting of adjusting entries. 
C) Requires the journalizing and posting of closing entries. 
D) Is done monthly or quarterly or in-between the year-end financial statements.

Question 16

Assets are considered current assets if they are cash or will usually be converted into cash:

Accepted Answer

A) Within a month or less. 
B) Within 3 months. 
C) Within a year or less. 
D) Within 6 months or less. 
A) Within a month or less. 
B) Within 3 months. 
C) Within a year or less. 
D) Within 6 months or less.

Question 17

The December 31,2017 worksheet for Fran's Fine Dining showed the following amounts related to the Supplies Expense account:

Accepted Answer

A) $870 
B) $745 
C) $0 
D) $125 
A) $870 
B) $745 
C) $0 
D) $125

Question 18

Return on equity is calculated by:

Accepted Answer

A) Dividing net income by total revenue. 
B) Dividing net income by average stockholders' equity. 
C) Dividing net income by working capital. 
D) Dividing dividends by stockholders' equity. 
A) Dividing net income by total revenue. 
B) Dividing net income by average stockholders' equity. 
C) Dividing net income by working capital. 
D) Dividing dividends by stockholders' equity.

Question 19

Only two adjustments appear in the adjustments column of a worksheet for Wycliff Publications: one to record $800 depreciation of office equipment and the other to record the use of $560 of office supplies.If the Trial Balance column totals are $15,380,what are the totals of the Adjusted Trial Balance columns?

Accepted Answer

A) $16,740 
B) $15,140 
C) $16,180 
D) $15,860 
A) $16,740 
B) $15,140 
C) $16,180 
D) $15,860

Question 20

The purpose of the after-closing trial balance is to give assurance that the accounts are in balance and ready for the new accounting period.

Accepted Answer

A) True 
 B)False

Exam 5: The Accounting Cycle: Reporting Financial Results

Measures of profitability tell us how quickly current assets can be converted into profits.

A debit balance in the income summary account indicates:

The Income Summary account has debits of $85,000 and credits of $75,000.The company had which of the following:

Of the following,which is not an alternative title for the income statement?

Which of the following accounts should not be closed?

If current assets are $180,000 and current liabilities are $130,000,working capital will be:

The report form of the balance sheet lists liabilities and owners' equity below assets.

Publicly owned companies must file their audited financial statements and detailed supporting schedules with the Financial Accounting Standards Board.

IFRS 1 requires that management and auditors should depart from compliance with GAAP if it is necessary to achieve a fair presentation when reporting financial results.

The dividends account should be:

If sales are $540,000,expenses are $440,000 and dividends are $50,000,Income Summary:

When a worksheet is used:

The current ratio is a measure of short-term debt paying ability.

The total debits in the After-Closing Trial Balance will equal:

Preparation of interim financial statements:

Assets are considered current assets if they are cash or will usually be converted into cash:

The December 31,2017 worksheet for Fran's Fine Dining showed the following amounts related to the Supplies Expense account:

Return on equity is calculated by:

The purpose of the after-closing trial balance is to give assurance that the accounts are in balance and ready for the new accounting period.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters