Question 1

Which of the following types of businesses might have an operating cycle longer than one year?

Accepted Answer

A)  Clothing retailer.
B)  Commercial airplane manufacturer.
C)  Wheat farmer.
D)  Florist.
E)  Ski resort.F) None of the above
G) A) and B)

Question 2

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

Accepted Answer

A)  Debit Income Summary $33,000; credit Owner Capital $33,000.
B)  Debit Owner Capital $33,000; credit Income Summary $33,000.
C)  Debit Income Summary $33,000; credit Owner Withdrawals $33,000.
D)  Debit Owner Withdrawals $33,000; credit Income Summary $33,000.
E)  Credit Owner Capital $33,000; debit Owner Withdrawals $33,000.F) A) and D)
G) A) and E)

Question 3

Which of the following statements about a company's operating cycle is not true:

Accepted Answer

A)  Most operating cycles are less than one year.
B)  For a merchandiser selling products, the operating cycle is the time span between paying suppliers for merchandise and receiving cash from customers.
C)  The operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services.
D)  The length of a company's operating cycle depends on its activities.
E)  Non-current items are those expected to come due within one year or the company's operating cycle.F) A) and E)
G) B) and E)

Question 4

The recurring steps performed each reporting period in preparing financial statements, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

Accepted Answer

A)  Closing cycle.
B)  Natural business year.
C)  Operating cycle.
D)  Accounting cycle.
E)  Accounting period.F) C) and E)
G) B) and C)

Question 5

How is a classified balance sheet different from an unclassified balance sheet? List the usual order of the categories on a classified balance sheet.

Accepted Answer

An unclassified balance sheet broadly gr...

Question 6

The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following: Office supplies used during the period, $1,200. Expiration of prepaid rent, $700.
Accrued salaries expense, $500. Depreciation expense, $800.
Accrued service fees receivable, $400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A)  $87,600
B)  $84,000
C)  $80,400.
D)  $85,700
E)  $85,900F) All of the above
G) A) and D)

Question 7

The work sheet is a required report made available to external decision makers.

Accepted Answer

A) True 
 B)False

Question 8

A classified balance sheet:

Accepted Answer

A)  Broadly groups items into assets, liabilities and equity.
B)  Measures a company's ability to pay its bills on time.
C)  Organizes assets and liabilities into important subgroups that provide more information.
D)  Reports operating, investing, and financing activities.
E)  Reports the effect of profit and withdrawals on owner's capital.F) B) and C)
G) D) and E)

Question 9

The withdrawals account is normally closed by debiting it.

Accepted Answer

A) True 
 B)False

Question 10

The following information is available for the Noir Detective Agency. After closing entries are posted, what will be the balance in the G. Noir, Capital account?   Net Loss $17,600 G. Noir, Capital 289,000 G. Noir, Withdrawals 32,000\begin{array}{lrr}	ext { Net Loss } & \$ 17,600 \	ext { G. Noir, Capital } & 289,000\	ext { G. Noir, Withdrawals }&32,000\end{array} Net Loss  G. Noir, Capital  G. Noir, Withdrawals ​$17,600289,00032,000​

Accepted Answer

A)  $303,400.
B)  $289,000.
C)  $239,400.
D)  $274,600.
E)  $257,000. F) All of the above
G) A) and B)

Question 11

Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities from the previous accounting period.

Accepted Answer

A) True 
 B)False

Question 12

If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio is 1.6

Accepted Answer

A) True 
 B)False

Question 13

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Accepted Answer

A)  Balance Sheet and Statement of Owner's Equity-Debit and Balance Sheet and Statement of Owner's Equity-Credit.
B)  Balance Sheet and Statement of Owner's Equity-Debit and Income Statement-Debit.
C)  Income Statement-Debit and Income Statement-Credit.
D)  Balance Sheet and Statement of Owner's Equity-Debit; and Income Statement-Credit.
E)  Balance Sheet and Statement of Owner's Equity-Credit and Income Statement-Credit.F) A) and B)
G) C) and E)

Question 14

The current ratio is computed by dividing current liabilities by current assets.

Accepted Answer

A) True 
 B)False

Question 15

When closing entries are made:

Accepted Answer

A)  All permanent accounts are closed but nominal accounts are not closed.
B)  All balance sheet accounts are closed.
C)  All real accounts are closed but nominal accounts are not closed.
D)  All temporary accounts are closed but permanent accounts are not closed.
E)  All ledger accounts are closed to start the new accounting period.F) B) and D)
G) A) and E)

Question 16

Adjusting entries are usually entered in the work sheet before they are entered in the general journal.

Accepted Answer

A) True 
 B)False

Question 17

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Accepted Answer

A)  N. Young, Capital.
B)  Depreciation Expense-Office Equipment.
C)  Office Equipment.
D)  Salaries Payable.
E)  Accumulated Depreciation-Office Equipment.F) B) and E)
G) C) and D)

Question 19

Plant assets are usually listed in order from most liquid to least liquid.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 4: Completing the Accounting Cycle

Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities from the previous accounting period.

Correct Answer
verified

The withdrawals account is normally closed by debiting it.

Correct Answer
verified

Which of the following statements about a company's operating cycle is not true:

Correct Answer
verified

Correct Answer
verified

How is a classified balance sheet different from an unclassified balance sheet? List the usual order of the categories on a classified balance sheet.

Correct Answer
verified
An unclassified balance sheet broadly gr...
View Answer

Adjusting entries are usually entered in the work sheet before they are entered in the general journal.

Correct Answer
verified

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Correct Answer
verified

When closing entries are made:

Correct Answer
verified

Plant assets are usually listed in order from most liquid to least liquid.

Correct Answer
verified

Correct Answer
verified

If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio is 1.6

Correct Answer
verified

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

Correct Answer
verified

A classified balance sheet:

Correct Answer
verified

Which of the following types of businesses might have an operating cycle longer than one year?

Correct Answer
verified

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Correct Answer
verified

The recurring steps performed each reporting period in preparing financial statements, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

Correct Answer
verified

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

Correct Answer
verified

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Correct Answer
verified

The work sheet is a required report made available to external decision makers.

Correct Answer
verified

The current ratio is computed by dividing current liabilities by current assets.

Correct Answer
verified

Exam 4: Completing the Accounting Cycle

Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities from the previous accounting period.

Correct AnswerverifiedShow Answer

The withdrawals account is normally closed by debiting it.

Correct AnswerverifiedShow Answer

Which of the following statements about a company's operating cycle is not true:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How is a classified balance sheet different from an unclassified balance sheet? List the usual order of the categories on a classified balance sheet.

Correct AnswerverifiedAn unclassified balance sheet broadly gr...View AnswerShow Answer

Adjusting entries are usually entered in the work sheet before they are entered in the general journal.

Correct AnswerverifiedShow Answer

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Correct AnswerverifiedShow Answer

When closing entries are made:

Correct AnswerverifiedShow Answer

Plant assets are usually listed in order from most liquid to least liquid.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio is 1.6

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A classified balance sheet:

Correct AnswerverifiedShow Answer

Which of the following types of businesses might have an operating cycle longer than one year?

Correct AnswerverifiedShow Answer

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Correct AnswerverifiedShow Answer

The recurring steps performed each reporting period in preparing financial statements, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

Correct AnswerverifiedShow Answer

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000. The entry to close the income summary account will be:

Correct AnswerverifiedShow Answer

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

Correct AnswerverifiedShow Answer

The work sheet is a required report made available to external decision makers.

Correct AnswerverifiedShow Answer

The current ratio is computed by dividing current liabilities by current assets.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
An unclassified balance sheet broadly gr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified