Question 1

Cash and office supplies are both classified as current assets.

Accepted Answer

A) True 
 B)False

Question 2

What is the order in which assets are generally listed on a classified statement of financial position?

Accepted Answer

A) Current and long-term. 
B) Intangible assets; long-term investments; property, plant, and equipment; current. 
C) Long-term investments; property, plant, and equipment; intangible assets; current 
D) Intangible assets; property, plant, and equipment; long-term investments; current.

Question 3

Closing entries may be prepared from all but which one of the following sources?

Accepted Answer

A) Adjusted balances in the ledger 
B) Income statement and statement of financial position columns of the worksheet 
C) statement of financial position 
D) Income and retained earnings statements

Question 4

The total dollar amount of assets to be classified as investments is

Accepted Answer

A) ¥0. 
B) ¥150,000. 
C) ¥75,000. 
D) ¥180,000.

Question 5

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

Accepted Answer

A) Large company with numerous accounts 
B) Small company with numerous accounts 
C) All companies, since worksheets are required under generally accepted accounting principles 
D) Small company with few accounts

Question 6

The following information is for Acme Auto Supplies:

The total dollar amount of assets to be classified as property, plant, and equipment is

Accepted Answer

A)  $ 315,000 
B)  $ 245,000 
C)  $ 165,000 
D)  $ 195,000

Question 7

The relationship between current assets and current liabilities is important in evaluating a company's

Accepted Answer

A) profitability. 
B) liquidity. 
C) market value. 
D) accounting cycle.

Question 8

Intangible assets are

Accepted Answer

A) listed under current assets on the statement of financial position. 
B) not listed on the statement of financial position because they do not have physical substance. 
C) noncurrent resources. 
D) listed as a long-term investment on the statement of financial position.

Question 9

After all closing entries have been posted, the revenue account will have a balance of

Accepted Answer

A) $0. 
B) $70,000 credit. 
C) $70,000 debit. 
D) $3,500 credit.

Question 10

On a classified statement of financial position, current assets are customarily listed

Accepted Answer

A) in alphabetical order. 
B) with the largest dollar amounts first. 
C) in the reverse order of liquidity. 
D) in the order of acquisition.

Question 11

A correcting entry

Accepted Answer

A) must involve one statement of financial position account and one income statement account. 
B) is another name for a closing entry. 
C) may involve any combination of accounts. 
D) is a required step in the accounting cycle.

Question 12

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 2011:

What is the company's net income for the year ending December 31, 2011?

Accepted Answer

A)  ¥ 133,000 
B)  ¥ 42,000 
C)   ¥ 28,000 
D)   ¥ 12,000

Question 13

A company's liquidity is concerned with the relationship between long-term investments and long-term debt.

Accepted Answer

A) True 
 B)False

Question 14

The followina information is for Acme Auto Supplies:

The total dollar amount of liabilities to be classified as current liabilities is

Accepted Answer

A)  $ 65,000 
B)  $ 75,000 
C)  $ 155,000 
D)  $ 165,000

Question 15

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 2011:

What are total current assets at December 31, 2011?

Accepted Answer

A)  ¥ 26,000 
B)  ¥ 32,000 
C)   ¥ 36,000 
D)   ¥ 218,000

Question 16

The final closing entry to be journalized is typically the entry that closes the

Accepted Answer

A) revenue accounts. 
B) dividends account. 
C) retained earnings account. 
D) expense accounts.

Question 17

A lawyer collected $830 of legal fees in advance.He erroneously debited Cash for $380 and credited Accounts Receivable for $380.The correcting entry is

Accepted Answer

A)  
B)  
C)  
D)

Question 18

All of the following are property, plant, and equipment except

Accepted Answer

A) supplies. 
B) machinery. 
C) land. 
D) buildings.

Question 19

The operating cycle of a company is the average time that is required to go from cash to

Accepted Answer

A) sales in producing revenues. 
B) cash in producing revenues. 
C) inventory in producing revenues. 
D) accounts receivable in producing revenues.

Question 20

Which of the following accounts is least likely to have its balance change on the worksheet?

Accepted Answer

A) Salaries Payable. 
B) Supplies. 
C) Accumulated Depreciation. 
D) Sharer Capital-ordinary.

Exam 4: Completing the Accounting Cycle