Question 1

The Accounts Receivable account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 2

The operating cycle is the process by which companies produce their financial statements for a specific period.

Accepted Answer

A) True 
 B)False

Question 3

A current ratio of 2.00 indicates that the company has $2 of:

Accepted Answer

A)  current liabilities for every $1 of current assets.
B)  total assets for every $1 of current liabilities.
C)  current assets for every $1 of current liabilities.
D)  total assets for every $1 of current assets.E) C) and D)
F) B) and C)

Question 4

Which of the following account's balance is carried forward to the next accounting period?

Accepted Answer

A)  Accumulated Depreciation
B)  Depreciation Expense
C)  Owner's Name, Withdrawals
D)  Sales RevenueE) B) and C)
F) A) and D)

Question 5

The post-closing trial balance shows the updated capital balance.

Accepted Answer

A) True 
 B)False

Question 6

Only permanent accounts appear on the post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 7

Adjusting journal entries are prepared:

Accepted Answer

A)  after preparing the adjusted trial balance.
B)  after preparing the unadjusted trial balance.
C)  after posting the closing entries.
D)  after preparing the financial statements.E) A) and B)
F) C) and D)

Question 8

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

Accepted Answer

A)  amounts
B)  dates of purchase
C)  liquidities
D)  durabilitiesE) B) and D)
F) A) and C)

Question 9

Which of the following would be considered the weakest current ratio?

Accepted Answer

A)  0.35
B)  1.10
C)  1.25
D)  1.80E) A) and B)
F) A) and C)

Question 10

Revenues and expenses are transferred to the ________ account before their final transfer into the Owner's Name, Capital account.

Accepted Answer

A)  net income.
B)  income summary
C)  withdrawals
D)  assetsE) B) and C)
F) A) and D)

Question 11

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

Accepted Answer

A)  Long-term assets
B)  Current assets
C)  Long-term liabilities
D)  Current liabilitiesE) All of the above
F) A) and B)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following assets is the most liquid?

Accepted Answer

A)  Building
B)  Prepaid Expenses
C)  Accounts Receivable
D)  CashE) A) and C)
F) B) and C)

Question 14

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

Accepted Answer

A)  Current assets
B)  Long-term liabilities
C)  Long-term assets
D)  Current liabilitiesE) A) and B)
F) A) and C)

Question 15

The formula for computing the current ratio is:

Accepted Answer

A)  Current assets ÷ Total assets
B)  Current assets ÷ Total liabilities
C)  Current assets ÷ Owner's Equity
D)  Current assets ÷ Current liabilitiesE) A) and B)
F) A) and C)

Question 16

Which of the following accounts will be included in a post-closing trial balance?

Accepted Answer

A)  Service Revenue
B)  Rent Expense
C)  Interest Expense
D)  Unearned Service RevenueE) A) and D)
F) A) and C)

Question 17

Which is a permanent account?

Accepted Answer

A)  Wages Expense
B)  Salary Payable
C)  Service Revenue
D)  Utilities ExpenseE) C) and D)
F) B) and C)

Question 18

The following is the adjusted trial balance for Tuttle Photography.  After the closing entries, what will the final balance in R. Tuttle, Capital be?

Accepted Answer

A)  $25,000
B)  $191,200
C)  $21,290
D)  $166,200E) A) and D)
F) A) and B)

Question 19

The balances of select accounts of Sandra Company as at 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?

Accepted Answer

A)  $1,200
B)  $4,000
C)  $5,200
D)  $25,000E) None of the above
F) C) and D)

Question 20

What is the result if the amount of Net Income for the year is less than the amount of the Owner's Withdrawals?

Accepted Answer

A)  Owner's Name, Capital increases
B)  Cash balance decreases
C)  Cash balance increases
D)  Owner's Name, Capital decreasesE) A) and D)
F) All of the above

Exam 4: Completing the Accounting Cycle

Which of the following would be considered the weakest current ratio?

Correct AnswerverifiedShow Answer

The following is the adjusted trial balance for Tuttle Photography. After the closing entries, what will the final balance in R. Tuttle, Capital be?

Correct AnswerverifiedShow Answer

Revenues and expenses are transferred to the ________ account before their final transfer into the Owner's Name, Capital account.

Correct AnswerverifiedShow Answer

Which of the following accounts will be included in a post-closing trial balance?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The post-closing trial balance shows the updated capital balance.

Correct AnswerverifiedShow Answer

The Accounts Receivable account is a permanent account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The operating cycle is the process by which companies produce their financial statements for a specific period.

Correct AnswerverifiedShow Answer

Only permanent accounts appear on the post-closing trial balance.

Correct AnswerverifiedShow Answer

A current ratio of 2.00 indicates that the company has $2 of:

Correct AnswerverifiedShow Answer

What is the result if the amount of Net Income for the year is less than the amount of the Owner's Withdrawals?

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

Correct AnswerverifiedShow Answer

Which is a permanent account?

Correct AnswerverifiedShow Answer

Which of the following assets is the most liquid?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following account's balance is carried forward to the next accounting period?

Correct AnswerverifiedShow Answer

Adjusting journal entries are prepared:

Correct AnswerverifiedShow Answer

The formula for computing the current ratio is:

Correct AnswerverifiedShow Answer

The balances of select accounts of Sandra Company as at 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?

Correct AnswerverifiedShow Answer

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