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| 1 | |
Which of the following accounts is a temporary account? |
| | A) | Accounts Payable |
| | B) | Unearned Revenue |
| | C) | Capital, Lola Delong |
| | D) | Withdrawals |
| | E) | Office Equipment |
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| 2 | |
Before the closing process is performed at the end of the accounting period, revenues and expenses should have which of the following? |
| | A) | A balance of zero |
| | B) | Balances of cumulative amounts of activity during the period |
| | C) | A net balance (credits minus debits) equal to the capital account |
| | D) | A net balance equal to assets minus liabilities |
| | E) | None of the above |
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| 3 | |
Which of the following closing entries is usually recorded last? |
| | A) | Closing the Income Summary account |
| | B) | Closing the expense accounts |
| | C) | Closing the withdrawals account |
| | D) | Closing the revenue accounts |
| | E) | Closing the Capital account |
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| 4 | |
Which of the following is listed on the post-closing trial balance for a sole proprietorship? |
| | A) | Income Summary account |
| | B) | Withdrawals account |
| | C) | Revenue account |
| | D) | Expense account |
| | E) | Liability account |
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| 5 | |
What are the main purposes of the post-closing trialbalance? |
| | A) | To make sure all transactions have been done correctly recorded |
| | B) | To verify that all the temporary or nominal accounts have zero balances |
| | C) | To verify that debit and credit totals for all permanent or real accounts are equal after the closing process is complete |
| | D) | B and C |
| | E) | All of the above |
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| 6 | |
Which of the following is a benefit to using a work sheet at the end of the accounting cycle? |
| | A) | Reduces errors when working with systems requiring many accounts and adjustments |
| | B) | Linking accounts and adjustments to their impacts in financial statements |
| | C) | Assists in planning and organizing an audit of financial statements |
| | D) | Useful in preparing interim statements |
| | E) | All of the above, but not limited to all of the above |
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| 7 | |
The subtotals of the Income Statement debit and credit columns of the work sheet are $7,300 and $9,800, respectively. If the subtotal of the Balance Sheet Debit column is $12,800, what should be the subtotal of the Balance Sheet Credit column? |
| | A) | $15,300 |
| | B) | $10,300 |
| | C) | $ 3,000 |
| | D) | $ 2,500 |
| | E) | A total other than the choices shown |
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| 8 | |
The subtotals of the Income Statement debit and credit columns of the work sheet are $11,400 and $9,600, respectively. If the subtotal of the Balance Sheet Debit column is $21,500, what should be the subtotal of the Balance Sheet Credit column? |
| | A) | $23,300 |
| | B) | $19,700 |
| | C) | $11,900 |
| | D) | $ 1,800 |
| | E) | A total other than the choices shown |
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| 9 | |
Which is not true about an adjusting entry? |
| | A) | A real account and a nominal account are affected |
| | B) | A permanent account and a temporary account are affected |
| | C) | A permanent and a real account are affected |
| | D) | It is required to satisfy the realization and matching principles |
| | E) | None of the above |
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| 10 | |
Which of the following statements about the accounting cycle is false? |
| | A) | Posting is done after transactions have been analyzed |
| | B) | Preparing the post-closing trial balance is done after the temporary account have been closed |
| | C) | Adjusting the accounts is done prior to preparing the adjusted trial balance |
| | D) | Journalizing the transactions is performed before preparing the unadjusted trial balance |
| | E) | Financial statements are prepared before preparing the adjusted trial balance. |
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| 11 | |
The accounting cycle consists of the following ten steps?| A. Preparing an adjusted trial balance | F. Journalizing | | B. Adjusting the accounts | G. Posting | | C. Preparing a post-closing trial balance | H. Closing temporary accounts | | D. Preparing an unadjusted trial balance | I. Preparing the statements | | E. Analyzing the transactions | J. Reversing entries |
What is the proper order of steps four through eight of the accounting cycle? |
| | A) | C, D, E, F, G |
| | B) | D, B, A, I, H |
| | C) | D, A, C, I, J |
| | D) | D, B, I, H, A |
| | E) | None of the above |
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| 12 | |
Current assets total $120,000, plant and equipment assets $24,000, current liabilities $48,000, and long-term liabilities $12,000. What is the current ratio of the business? |
| | A) | 1.0:1 |
| | B) | 2.0:1 |
| | C) | 2.5:1 |
| | D) | 3.0:1 |
| | E) | None of the above |
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| 13 | |
Which year shows the best current ratio? |
| | A) | |
| | B) | |
| | C) | |
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| | E) | |
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| 14 | |
Current assets total $240,000 and current liabilities total $120,000. The company pays off an accounts payable of $30,000 with cash. How the does the current ratio change after the transaction? |
| | A) | It does not change |
| | B) | It changes from 2.00:1 to 1.80:1 |
| | C) | It changes from 2.00:1 to 2.25:1 |
| | D) | It changes from 2.00:1 to 2.33:1 |
| | E) | It changes from 2.00:1 to 3.00:1 |
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| 15 | |
Optional entries that transfer the balances in balance sheet accounts which arose as a result of certain adjusting entries to income statement accounts is the definition for which term below? |
| | A) | Adjusting entries |
| | B) | Reversing entries |
| | C) | Closing entries |
| | D) | Declarations of cash dividends |
| | E) | Payment of cash dividends |
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| 16 | |
At the end of the fiscal year, an adjusting entry was made for accrued salaries of $1,500. On the first day of the following year, the adjusting entry was reversed. The salaries for one week, $3,750, were paid on the first Friday of the following year. The entry to record paying the salaries expense for the week would be which of the following? |
| | A) | Salaries Exp., debit, $1,500; Salaries Payable, debit, $2,250; Cash, credit, $3,750 |
| | B) | Salaries Expense, debit, $3,750; Cash, credit, $3,750 |
| | C) | Salaries Exp., debit, $2,250; Salaries Payable, debit, $1,500; Cash, credit, $3,750 |
| | D) | Salaries Expense, debit, $3,750; Salaries Payable, credit, $3,750 |
| | E) | None of the journal entries shown above |
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