|
E |
Another name for temporary accounts is: A. Real accounts. B. Contra accounts. C. Accrued accounts. D. Balance column accounts. E. Nominal accounts. |
|
B |
When closing entries are made: A. All ledger accounts are closed to start the new accounting period. B. All temporary accounts are closed but not the permanent accounts. C. All real accounts are closed but not the nominal accounts. D. All permanent accounts are closed but not the nominal accounts. E. All balance sheet accounts are closed |
|
B |
Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: A. Real accounts. B. Temporary accounts. C. Closing accounts. D. Permanent accounts. E. Balance sheet accounts. |
|
A |
Which of the following statements is incorrect? A. Permanent accounts is another name for nominal accounts. B. Temporary accounts carry a zero balance at the beginning of each accounting period. C. The Income Summary account is a temporary account. D. Real accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence. E. The closing process applies only to temporary accounts. |
|
C |
Assets, liabilities, and equity accounts are not closed; these accounts are called: A. Nominal accounts. B. Temporary accounts. C. Permanent accounts. D. Contra accounts. E. Accrued accounts. |
|
E |
Closing the temporary accounts at the end of each accounting period: A. Serves to transfer the effects of these accounts to the owner’s capital account on the balance sheet. B. Prepares the withdrawals account for use in the next period. C. Gives the revenue and expense accounts zero balances. D. Causes owner’s capital to reflect increases from revenues and decreases from expenses and withdrawals. E. All of these. |
|
B |
Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner’s capital account for the events of the period just finished are referred to as: A. Adjusting entries. B. Closing entries. C. Final entries. D. Work sheet entries. E. Updating entries. |
|
D |
The closing process is necessary in order to: A. calculate net income or net loss for an accounting period. B. ensure that all permanent accounts are closed to zero at the end of each accounting period. C. ensure that the company complies with state laws. D. ensure that net income or net loss and owner withdrawals for the period are closed into the owner’s capital account. E. ensure that management is aware of how well the company is operating. |
|
D |
Closing entries are required: A. if management has decided to cease operating the business. B. only if the company adheres to the accrual method of accounting. C. if a company’s bookkeeper forgets to prepare reversing entries. D. if the temporary accounts are to reflect correct amounts for each accounting period. E. in order to satisfy the Internal Revenue Service. |
|
C |
The recurring steps performed each reporting period, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the: A. Accounting period. B. Operating cycle. C. Accounting cycle. D. Closing cycle. E. Natural business year. |
|
C |
Which of the following is the usual final step in the accounting cycle? A. Journalizing transactions. B. Preparing an adjusted trial balance. C. Preparing a post-closing trial balance. D. Preparing the financial statements. E. Preparing a work sheet. |
|
B |
A classified balance sheet: A. Measures a company’s ability to pay its bills on time. B. Organizes assets and liabilities into important subgroups. C. Presents revenues, expenses, and net income. D. Reports operating, investing, and financing activities. E. Reports the effect of profit and withdrawals on owner’s capital. |
|
A |
The assets section of a classified balance sheet usually includes: A. Current assets, long-term investments, plant assets, and intangible assets. B. Current assets, long-term assets, revenues, and intangible assets. C. Current assets, long-term investments, plant assets, and equity. D. Current liabilities, long-term investments, plant assets, and intangible assets. E. Current assets, liabilities, plant assets, and intangible assets. |
|
C |
The usual order for the asset section of a classified balance sheet is: A. Current assets, prepaid expenses, long-term investments, intangible assets. B. Long-term investments, current assets, plant assets, intangible assets. C. Current assets, long-term investments, plant assets, intangible assets. D. Intangible assets, current assets, long-term investments, plant assets. E. Plant assets, intangible assets, long-term investments, current assets. |
|
C |
A classified balance sheet differs from an unclassified balance sheet in that A. a unclassified balance sheet is never used by large companies. B. a classified balance sheet normally includes only three subgroups. C. a classified balance sheet presents information in a manner that makes it easier to calculate a company’s current ratio. D. a classified balance sheet will include more accounts than an unclassified balance sheet for the same company on the same date. E. a classified balance sheet cannot be provided to outside parties. |
|
E |
Two common subgroups for liabilities on a classified balance sheet are: A. current liabilities and intangible liabilities. B. present liabilities and operating liabilities. C. general liabilities and specific liabilities. D. intangible liabilities and long-term liabilities. E. current liabilities and long-term liabilities. |
|
D |
The current ratio: A. Is used to measure a company’s profitability. B. Is used to measure the relation between assets and long-term debt. C. Measures the effect of operating income on profit. D. Is used to help evaluate a company’s ability to pay its debts in the near future. E. Is calculated by dividing current assets by equity. |
|
E |
The current ratio: A. Is calculated by dividing current assets by current liabilities. B. Helps to assess a company’s ability to pay its debts in the near future. C. Can reveal problems in a company if it is less than 1. D. Can affect a creditor’s decision about whether to lend money to a company. E. All of these. |
|
A |
The Unadjusted Trial Balance columns of a company’s work sheet show the balance in the Office Supplies account as $750. The Adjustments columns show that $425 of these supplies were used during the period. The amount shown as Office Supplies in the Balance Sheet columns of the work sheet is: A. $325 debit. B. $325 credit. C. $425 debit. D. $750 debit. E. $750 credit. |
|
B |
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 tool in the accounting process is a(n) : A. Adjusted trial balance. B. Work sheet. C. Post-closing trial balance. D. Unadjusted trial balance. E. General ledger. |
|
A |
Accumulated Depreciation, Accounts Receivable, and Service Fees Earned would be sorted to which respective columns in completing a work sheet? A. Balance Sheet or Statement of Owner’s Equity-Credit; Balance Sheet or Statement of Owner’s Equity Debit; and Income Statement-Credit. B. Balance Sheet or Statement of Owner’s Equity-Debit; Balance Sheet or Statement of Owner’s Equity-Credit; and Income Statement-Credit. C. Income Statement-Debit; Balance Sheet or Statement of Owner’s Equity-Debit; and Income Statement-Credit. D. Income Statement-Debit; Income Statement-Debit; and Balance Sheet or Statement of Owner’s Equity-Credit. E. Balance Sheet or Statement of Owner’s Equity-Credit; Income Statement-Debit; and Income Statement-Credit. |
|
D |
Which of the following statements is incorrect? A. Working papers are useful aids in the accounting process. B. On the work sheet, the effects of the accounting adjustments are shown on the account balances. C. After the work sheet is completed, it can be used to help prepare the financial statements. D. On the work sheet, the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance. E. A worksheet is not a substitute for financial statements. |
|
A |
A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in: A. $200 decrease in net income. B. $200 increase in net income. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. D. $200 of prepaid insurance. E. An error in the financial statements. |
|
A |
Statements that show the effects of proposed transactions as if the transactions had already occurred are called: A. Pro forma statements. B. Professional statements. C. Simplified statements. D. Temporary statements. E. Interim statements. |
|
C |
If in preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is: A. An expense amount placed in the Balance Sheet Credit column. B. A revenue amount placed in the Balance Sheet Debit column. C. A liability amount placed in the Income Statement Credit column. D. An asset amount placed in the Balance Sheet Credit column. E. A liability amount placed in the Balance Sheet Debit column. |
|
E |
. If the Balance Sheet and Statement of Owner’s Equity columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet and Statement of Owner’s Equity Credit column, the cause could be: A. An expense amount entered in the Balance Sheet and Statement of Owner’s Equity Debit column. B. A revenue amount entered in the Balance Sheet and Statement of Owner’s Equity Credit column. C. An asset amount entered in the Income Statement and Statement of Owner’s Equity Debit column. D. A liability amount entered in the Income Statement and Statement of Owner’s Equity Credit column. E. An expense amount entered in the Balance Sheet and Statement of Owner’s Equity Credit column. |
|
B |
The following items appeared on a company’s December 31 work sheet for the current period. Based on the following information, what is net income for the current period? A. $1,400. B. $1,855. C. $1,905. D. $2,060. E. $4,670. |
|
D |
Which of the following errors would cause the Balance Sheet and Statement of Owner’s Equity columns of a work sheet to be out of balance? 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 and Statement of Owner’s Equity Debit column. D. Entering a revenue amount in the Balance Sheet and Statement of Owner’s Equity Debit column. E. Entering a liability amount in the Balance Sheet and Statement of Owner’s Equity Credit column. |
|
C |
The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following: 1. Office supplies used during the period, $1,200. 2. Expiration of prepaid rent, $700. 3. Accrued salaries expense, $500. 4. Depreciation expense, $800. 5. Accrued service fees receivable, $400. The Adjusted Trial Balance columns total is: A. $80,400. B. $84,000. C. $85,700. D. $85,900. E. $87,600. |
|
B |
The balances in the unadjusted columns of a work sheet will agree with: A. the balances reflected in the company’s financial statements. B. the balances reflected in the company’s unadjusted trial balance. C. whatever balances management has decided to report. D. the balances in the company’s post-closing trial balance. E. the balances management budgeted for the accounting period. |
Share This
Flashcard
