Question 1

The current ratio:

Accepted Answer

A)  Is used to measure a company's profitability. 
B)  Is used to measure the relationship between assets and long-term debt. 
C)  Measures the effect of operating income on profit. 
D)  Is used to evaluate a company's ability to pay its short-term obligations. 
E)  Only relates to long term liabilities.

Question 2

A post-closing trial balance is a list of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.

Accepted Answer

A) True 
 B)False

Question 3

On the work sheet,a net income is entered in the Income Statement Credit column and in the Statement of Changes in Equity or Balance Sheet Debit column.

Accepted Answer

A) True 
 B)False

Question 4

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from)the owner's capital account is the:

Accepted Answer

A)  Income Summary account. 
B)  Closing account. 
C)  Balance column account. 
D)  Contra account. 
E)  Nominal account.

Question 5

After posting the entries to close all revenue and expense accounts,Hatfield Company's Income Summary account has a credit balance of $6,000,and the Hatfield,Withdrawals account has a debit balance of $2,500.These balances indicate that net income for the accounting period amounted to $3,500.

Accepted Answer

A) True 
 B)False

Question 6

Closing entries are needed at the end of the fiscal period to close all ledger accounts.

Accepted Answer

A) True 
 B)False

Question 7

Identify the steps in the accounting cycle.

Accepted Answer

The answer of Identify the steps in the accounting cycle....

Question 8

Reversing entries are optional.

Accepted Answer

A) True 
 B)False

Question 9

To prepare the balance sheet,all necessary numbers can be found in the balance sheet columns of the work sheet,including ending capital.

Accepted Answer

A) True 
 B)False

Question 10

Real accounts are:

Accepted Answer

A)  Another name for temporary accounts. 
B)  Another name for permanent accounts. 
C)  Closed at the end of the accounting period. 
D)  Income statement accounts. 
E)  Not shown on the balance sheet.

Question 11

A 10-column spreadsheet used to draft a company's unadjusted trial balance,adjusting entries,adjusted trial balance,and financial statements,and which is an optional step in the accounting process,is a(n):

Accepted Answer

A)  Adjusted trial balance. 
B)  Work sheet. 
C)  Post-closing trial balance. 
D)  Unadjusted trial balance. 
E)  Book of final entry.

Question 12

The adjusted trial balance of Sara's Photography follows:

Accepted Answer

The answer of The adjusted trial balance of Sara's Photography...

Question 13

Describe a work sheet and explain why it is useful.

Accepted Answer

The answer of Describe a work sheet and explain why...

Question 14

Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers are called:

Accepted Answer

A)  Adjusting papers. 
B)  Statement papers. 
C)  Working papers. 
D)  Closing papers. 
E)  Business papers.

Question 15

Which of the following errors would cause the balance sheet columns of a work sheet to be out of balance?

Accepted Answer

A)  Entering an asset amount in the Income Statement Debit column. 
B)  Entering a liability amount in the Income Statement Credit column. 
C)  Entering an expense amount in the Balance Sheet Debit column. 
D)  Entering a revenue amount in the Balance Sheet Debit column. 
E)  Entering a liability amount in the Balance Sheet Credit column.

Question 16

An unclassified balance sheet provides more information to users than a classified balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Current liabilities include accounts receivable,unearned revenues,and taxes owed.

Accepted Answer

A) True 
 B)False

Question 18

A current ratio of 1.1 suggests that a company has ____________ current assets to cover current liabilities.

Accepted Answer

The answer of A current ratio of 1.1 suggests that...

Question 19

Income Summary is a temporary account.

Accepted Answer

A) True 
 B)False

Question 20

After all appropriate closing entries to the following accounts have been made,what will be the balance in the Jeff Corvette,Capital account?

Accepted Answer

A)  $65,000. 
B)  $80,000. 
C)  $130,000. 
D)  $145,000. 
E)  $280,000.

Exam 4: Completing the Accounting Cycle and Classifying Accounts

The current ratio:

A post-closing trial balance is a list of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.

On the work sheet,a net income is entered in the Income Statement Credit column and in the Statement of Changes in Equity or Balance Sheet Debit column.

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

After posting the entries to close all revenue and expense accounts,Hatfield Company's Income Summary account has a credit balance of $6,000,and the Hatfield,Withdrawals account has a debit balance of $2,500.These balances indicate that net income for the accounting period amounted to $3,500.

Closing entries are needed at the end of the fiscal period to close all ledger accounts.

Identify the steps in the accounting cycle.

Reversing entries are optional.

To prepare the balance sheet,all necessary numbers can be found in the balance sheet columns of the work sheet,including ending capital.

Real accounts are:

A 10-column spreadsheet used to draft a company's unadjusted trial balance,adjusting entries,adjusted trial balance,and financial statements,and which is an optional step in the accounting process,is a(n) :

The adjusted trial balance of Sara's Photography follows:

Describe a work sheet and explain why it is useful.

Internal documents prepared by accountants when organizing the information presented in formal reports to internal and external decision makers are called:

Which of the following errors would cause the balance sheet columns of a work sheet to be out of balance?

An unclassified balance sheet provides more information to users than a classified balance sheet.

Current liabilities include accounts receivable,unearned revenues,and taxes owed.

A current ratio of 1.1 suggests that a company has ____________ current assets to cover current liabilities.

Income Summary is a temporary account.

After all appropriate closing entries to the following accounts have been made,what will be the balance in the Jeff Corvette,Capital account?