Deck 4: Completing the Accounting Cycle

Question 1

Patents,copyrights,and trademarks are examples of ________.

A)short-term investments
B)fixed assets
C)long-term investments
D)intangible assets

Answer 1

D

Question 2

Property,plant,and equipment are categorized as ________.

A)current assets
B)fixed assets
C)long-term investments
D)short-term investments

Answer 2

B

Question 3

Under which of the following categories would bonds held as an investment for less than a year appear?

A)long-term assets
B)current assets
C)long-term liabilities
D)current liabilities

Answer 3

B

Question 4

The time span during which cash is paid for goods and services,which are then sold to customers from whom the business collects cash,is called the ________.

A)production time
B)operating cycle
C)accounting cycle
D)sales time

Question 5

The financial statements are prepared from the ________.

A)adjusted trial balance
B)chart of accounts
C)statement of retained earnings
D)unadjusted trial balance

Question 6

Which of the following is a measure of how quickly an item can be converted to cash?

A)debt ratio
B)current ratio
C)liquidity
D)accounting cycle

Question 7

A balance sheet prepared in the account form lists the assets at the top and the liabilities and stockholders' equity below.

Question 8

All assets that will not be converted to cash or used up within the business's operating cycle or one year,whichever is greater,are called ________.

A)long-term assets
B)fully depreciated assets
C)current assets
D)current liabilities

Question 9

Which of the following is a current asset that is expected to be converted to cash,sold,or consumed during the next year (or the normal operating cycle,if longer)?

A)land
B)equipment
C)building
D)Accounts Receivable

Question 10

Which of the following is the most liquid asset?

A)Building
B)Prepaid Expenses
C)Accounts Receivable
D)Cash

Question 11

An income statement includes ________.

A)Land and Salaries Payable
B)Common Stock,Retained Earnings,and Dividends
C)Furniture and Cash
D)Service Revenue and Utilities Expense

Question 12

Under which of the following categories would bonds held as an investment for more than a year appear?

A)current assets
B)long-term liabilities
C)long-term assets
D)current liabilities

Question 13

The operating cycle is the time span required for a business to repay its long-term liabilities.

Question 14

A balance sheet prepared in the report form,lists the assets on the left,and the liabilities and stockholders' equity on the right.

Question 15

The financial statement that reports assets,liabilities,and stockholders' equity as of the last day of the period is called the ________.

A)income statement
B)statement of retained earnings
C)balance sheet
D)unadjusted trial balance

Question 16

In a balance sheet,assets are classified as either current or long-term depending on their liquidity.

Question 17

Assets that are expected to be converted to cash,sold,or used up during the next 12 months,or within the business's normal operating cycle if the cycle is longer than a year are called ________ assets.

A)intangible
B)plant
C)long-term
D)current

Question 18

Salaries Payable,Interest Payable,and Unearned Revenue are examples of ________.

A)short-term investments
B)fixed assets
C)current liabilities
D)long-term liabilities

Question 19

Under which of the following categories would Accounts Receivable appear?

A)current assets
B)current liabilities
C)long-term assets
D)long-term liabilities

Question 20

Prepaid Rent is always classified as a long-term asset.

Question 21

Buildings,land,and equipment are classified as ________.

A)current assets
B)long-term assets
C)current liabilities
D)long-term liabilities

Question 22

Which of the following would be considered a long-term asset?

A)Accounts Payable
B)Land
C)Cash
D)Common Stock

Question 23

The ending balances in the Common Stock and Dividend accounts are shown on the income statement columns of the worksheet.

Question 24

Which of the following is an example of an intangible asset?

A)equipment
B)plant
C)property
D)copyright

Question 25

Which of the following statements explains a classified balance sheet?

A)Accounts are classified by their purchase dates.
B)Account balances are listed from the highest amount to the lowest amount.
C)Assets are listed in the order of their liquidity.
D)Assets are listed in alphabetical order.

Question 26

The last two columns generally found on the right side of the worksheet are the income statement columns.

Question 27

A balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n)________.

A)report form balance sheet
B)unclassified form balance sheet
C)account form balance sheet
D)audited form balance sheet

Question 28

Notes Payable due within two years are classified as ________.

A)current liabilities
B)current assets
C)long-term liabilities
D)long-term assets

Question 29

Which of the following is a plant asset?

A)equipment
B)patents
C)trademark
D)Accounts Receivable

Question 30

Net income (loss)is the difference between the total debits and the total credits in the income statement columns of the worksheet.

Question 31

Liquidity is a measure of how ________.

A)quickly an asset may be converted into cash
B)long an asset can be used
C)easily an asset can be exchanged for another asset
D)short an operating cycle is

Question 32

Assets are listed in the order of their ________ on the balance sheet.

A)magnitude
B)dates of purchase
C)liquidity
D)durability

Question 33

The balances of select accounts of Sandra Inc.as of December 31,2015 are given below: The unearned revenue is the amount of cash received for services to be rendered in January,2016.

-What are the total long-term liabilities shown on the balance sheet?

A)$1,200
B)$4,000
C)$5,200
D)$25,000

Question 34

The balances of select accounts of Sandra Inc.as of December 31,2015 are given below: The unearned revenue is the amount of cash received for services to be rendered in January,2016.

-What are the total current liabilities shown on the balance sheet?

A)$5,700
B)$10,400
C)$12,900
D)$11,700

Question 35

The balances of select accounts of Sandra Inc.as of December 31,2015 are given below.

-What are the total long-term assets that would be shown on the balance sheet?

A)$120,000
B)$152,200
C)$155,000
D)$158,000

Question 36

Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet.

Question 37

Under which of the following categories would Accounts Payable appear?

A)long-term assets
B)current assets
C)long-term liabilities
D)current liabilities

Question 38

In the worksheet,the adjusted balance in the Service Revenue account is also recorded in the credit column of the income statement.

Question 39

The balances of select accounts of Sandra Inc.as of December 31,2015 are given below:

-The insurance has been prepaid for the next half year.Determine the amount of total current assets reported on the balance sheet.

A)$10,500
B)$5,700
C)$8,650
D)$6,150

Question 40

Assets with no physical form are called ________.

A)current assets
B)intangible assets
C)long-term investments
D)mortgaged investments

Question 41

The Interest Expense in the worksheet's unadjusted trial balance column is $3,000.Interest Expense in the income statement column is $7,000.Which of the following entries would have caused this difference?

A)a $7,000 credit to Interest Expense in the worksheet's adjustments column
B)a $7,000 credit to Interest Payable in the worksheet's adjustments column
C)a $4,000 debit to Interest Expense in the worksheet's adjustments column
D)a $4,000 credit to Interest Expense in the worksheet's adjustments column

Question 42

The closing process helps in measuring each period's net income separately from all other periods.

Question 43

Where does Net Income appear on a worksheet?

A)Net income appears only in the income statement debit column.
B)Net income appears in the balance sheet credit column and in the income statement debit column.
C)Net income appears in the income statement credit column and in the balance sheet debit column.
D)Net income appears only in the balance sheet credit column.

Question 44

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

A)Rent Revenue
B)Insurance Expense
C)Salaries Payable
D)Equipment

Question 45

In which of the columns of a worksheet would a net loss be found?

A)in the balance sheet credit column and the income statement debit column
B)in the balance sheet debit column and the income statement credit column
C)in the unadjusted trial balance credit column,the adjusted trial balance credit column and the balance sheet credit column
D)in the unadjusted trial balance debit column,the adjusted trial balance debit column and the balance sheet debit column

Question 46

Which of the following statements is true if the income statement credit column exceeds the income statement debit column on a worksheet?

A)The company made a net profit.
B)The company incurred a net loss.
C)The retained earnings account decreased during the period.
D)The total liabilities exceed total assets.

Question 47

Which of the following statements is true of the worksheet?

A)The Net Income is recorded in the income statement credit column.
B)The Net Income is recorded in the adjusted trial balance debit column.
C)The Net Income is recorded in the income statement debit column.
D)The Net Income is recorded in the balance sheet debit column.

Question 48

Which of the following statements is true if the income statement debit column exceeds the income statement credit column of a worksheet?

A)The company incurred a net loss.
B)The retained earnings account increased during the period.
C)The company made a net profit.
D)The liabilities are greater than assets.

Question 49

Which of the following accounts would appear in the balance sheet debit column?

A)Unearned service revenue
B)Accumulated Depreciation
C)Service Revenue
D)Prepaid Insurance

Question 50

Which of the following accounts would appear in the income statement credit column?

A)Service Revenue
B)Prepaid Insurance
C)Unearned service revenue
D)Depreciation Expense

Question 51

Which of the following accounts would appear in the income statement debit column?

A)Unearned service revenue
B)Service Revenue
C)Depreciation Expense
D)Prepaid Insurance

Question 52

Which of the following is true of a completed worksheet?

A)The total debits in the unadjusted trial balance column equal the total debits in the adjusted trial balance column.
B)The total debits in the income statement column equal the total credits in the balance sheet column.
C)The total debits in the income statement column equal the total debits in the balance sheet column.
D)The total of all the debit columns is equal to the total of all the credit columns.

Question 53

Which of the following accounts would appear in the balance sheet credit column?

A)Prepaid Insurance
B)Buildings
C)Unearned service revenue
D)Service Revenue

Question 54

Permanent accounts are not closed at the end of the accounting period.

Question 55

The worksheet helps accountants to ________.

A)make the adjusted trial balance
B)prepare the financial statements
C)prepare the unadjusted trial balance
D)maintain books of accounts without a journal

Question 56

Which of the following statements is true of the worksheet?

A)The worksheet is a ledger.
B)The worksheet is a document used to summarize data to prepare financial statements.
C)The worksheet is a financial statement issued to the public to communicate the financial results of a company.
D)The worksheet is a journal.

Question 57

The adjusting process zeroes out all revenue accounts and all expense accounts.

Question 58

In which of the columns of the worksheet would Net Income be found?

A)under the unadjusted trial balance credit column,the adjusted trial balance credit column and the balance sheet credit column
B)under the unadjusted trial balance debit column,the adjusted trial balance debit column and the balance sheet debit column
C)under the balance sheet debit column and the income statement credit column
D)under the balance sheet credit column and the income statement debit column

Question 59

The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000.Prepaid Rent in the balance sheet column is $2,000.Which of the following entries would have caused this difference?

A)a $2,000 debit entry to Prepaid Rent in the worksheet's adjustments column
B)a $2,000 credit entry to Rent Expense in the worksheet's adjustments column
C)a $2,000 credit entry to Prepaid Rent in the worksheet's adjustments column
D)a $2,000 debit entry to Cash in the worksheet's adjustments column

Question 60

The following is the adjusted trial balance from the worksheet for Tuttle Photography.
Using the information provided in the worksheet above,prepare an income statement for Tuttle Photography.

Question 61

The Office Supplies Expense account is a temporary account.

Question 62

As a part of the closing process,revenues and expenses are closed to a temporary account called the Net Income (loss)account.

Question 63

Revenue and expense accounts are closed to the Income Summary account.

Question 64

The Cash account is a temporary account.

Question 65

The Accumulated Depreciation account is a permanent account.

Question 66

The permanent accounts-assets,liabilities,and stockholders' equity-are closed to the Common Stock account.

Question 67

The Common Stock account is a temporary account.

Question 68

The Dividends account is a permanent account.

Question 69

The Depreciation Expense account is a temporary account.

Question 70

The Service Revenue account is a temporary account.

Question 71

The Service Revenue account is a permanent account.

Question 72

The Common Stock account is a permanent account.

Question 73

The Accounts Receivable account is a permanent account.

Question 74

In the closing process,the Dividends account is closed to the Retained Earnings account.

Question 75

The Salaries Payable account is a permanent account.

Question 76

Asset and liability accounts are closed to the Income Summary account.

Question 77

The Office Supplies account is a temporary account.

Question 78

The beginning balance in the Common Stock account of a company was $10,000.The revenues and expenses were $200,000 and $120,000,respectively.During the year,the company declared and paid dividends for $4,000.The ending balance in the Retained Earnings was $76,000.(Assume that the opening balance of Retained Earnings was zero.)

Question 79

The Accounts Payable account is a temporary account.

Question 80

The Salaries Expense account is a temporary account.