Question 1

The two optional steps in the accounting cycle are preparing

Accepted Answer

A)  a post-closing trial balance and reversing entries.
B)  a worksheet and post-closing trial balances.
C)  reversing entries and a worksheet.
D)  an adjusted trial balance and a post-closing trial balance.E) B) and D)
F) All of the above

Question 2

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information:  The entry to close the revenue account includes a

Accepted Answer

A)  debit to Income Summary for $1,300.
B)  credit to Income Summary for $1,300.
C)  debit to Income Summary for $7,000.
D)  credit to Income Summary for $7,000.E) A) and B)
F) A) and C)

Question 3

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.E) None of the above
F) A) and C)

Question 4

Which of the following depicts the proper sequence of steps in the accounting cycle?

Accepted Answer

A)  Journalize the transactions, analyze business transactions, prepare a trial balance
B)  Prepare a trial balance, prepare financial statements, prepare adjusting entries
C)  Prepare a trial balance, prepare adjusting entries, prepare financial statements
D)  Prepare a trial balance, post to ledger accounts, post adjusting entriesE) A) and B)
F) None of the above

Question 5

The most important information needed to determine if companies can pay their current obligations is the

Accepted Answer

A)  net income for this year.
B)  projected net income for next year.
C)  relationship between current assets and current liabilities.
D)  relationship between short-term and long-term liabilities.E) None of the above
F) B) and C)

Question 6

Closing entries are

Accepted Answer

A)  an optional step in the accounting cycle.
B)  posted to the ledger accounts from the worksheet.
C)  made to close permanent or real accounts.
D)  journalized in the general journal.E) C) and D)
F) None of the above

Question 7

Under IFRS

Accepted Answer

A)  companies can apply fair value to property, plant, and equipment and natural resources.
B)  companies can apply fair value to property, plant, and equipment but not to natural resources.
C)  companies can apply fair value to neither property, plant, and equipment nor natural resources.
D)  companies can apply fair value to natural resources but not to property, plant, and equipment.E) A) and D)
F) A) and C)

Question 8

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

Accepted Answer

A)  earned net income for the period.
B)  an error because debits do not equal credits.
C)  suffered a net loss for the period.
D)  to make an adjusting entry.E) A) and B)
F) B) and D)

Question 9

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

Accepted Answer

A)  They should be inserted in alphabetical order into the trial balance accounts already given.
B)  They should be inserted in chart of account order into the trial balance already given.
C)  They should be inserted on the lines immediately below the trial balance totals.
D)  They should not be inserted on the trial balance until the next accounting period.E) C) and D)
F) B) and C)

Question 10

Which of the following would not be classified a long-term liability?

Accepted Answer

A)  Current maturities of long-term debt
B)  Bonds payable
C)  Mortgage payable
D)  Lease liabilitiesE) A) and D)
F) A) and B)

Question 11

The following information is for Bright Eyes Auto Supplies:  The total dollar amount of assets to be classified as investments is

Accepted Answer

A)  $0.
B)  $140,000.
C)  $180,000.
D)  $250,000.E) C) and D)
F) A) and C)

Question 12

The dividends account is a permanent account whose balance is carried forward to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 13

Liabilities are generally classified on a balance sheet as

Accepted Answer

A)  small liabilities and large liabilities.
B)  present liabilities and future liabilities.
C)  tangible liabilities and intangible liabilities.
D)  current liabilities and long-term liabilities.E) A) and C)
F) All of the above

Question 14

An error has occurred in the closing entry process if

Accepted Answer

A)  revenue and expense accounts have zero balances.
B)  the retained earnings account is credited for the amount of net income.
C)  the dividends account is closed to the retained earnings account.
D)  the balance sheet accounts have zero balances.E) A) and B)
F) A) and C)

Question 15

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 16

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015:  What is the book value of the equipment at December 31, 2015?

Accepted Answer

A)  $170,000
B)  $182,000
C)  $210,000
D)  $238,000E) B) and D)
F) A) and B)

Question 17

The account, Supplies, will appear in the following debit columns of the worksheet.

Accepted Answer

A)  Trial balance
B)  Adjusted trial balance
C)  Balance sheet
D)  All of these answer choices are correctE) A) and D)
F) B) and C)

Question 18

Which of the following steps in the accounting cycle would not generally be performed daily?

Accepted Answer

A)  Journalize transactions
B)  Post to ledger accounts
C)  Prepare adjusting entries
D)  Analyze business transactionsE) All of the above
F) B) and D)

Question 19

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

Accepted Answer

A)  supplies.
B)  machinery.
C)  land.
D)  buildings.E) A) and C)
F) None of the above

Question 20

The income statement and balance sheet columns of Iron and Wine Company's worksheet reflect the following totals:  To enter the net income (or loss)  for the period into the above worksheet requires an entry to the

Accepted Answer

A)  income statement debit column and the balance sheet credit column.
B)  income statement credit column and the balance sheet debit column.
C)  income statement debit column and the income statement credit column.
D)  balance sheet debit column and the balance sheet credit column.E) All of the above
F) None of the above

Exam 4: Completing the Accounting Cycle

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The entry to close the revenue account includes a

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Which of the following depicts the proper sequence of steps in the accounting cycle?

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The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

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Which of the following would not be classified a long-term liability?

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The most important information needed to determine if companies can pay their current obligations is the

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

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The account, Supplies, will appear in the following debit columns of the worksheet.

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Which of the following steps in the accounting cycle would not generally be performed daily?

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The income statement and balance sheet columns of Iron and Wine Company's worksheet reflect the following totals: To enter the net income (or loss) for the period into the above worksheet requires an entry to the

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The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: What is the book value of the equipment at December 31, 2015?

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

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Liabilities are generally classified on a balance sheet as

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Under IFRS

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Closing entries are

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An error has occurred in the closing entry process if

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When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

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The dividends account is a permanent account whose balance is carried forward to the next accounting period.

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If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

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The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as investments is

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The two optional steps in the accounting cycle are preparing

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