Ch4
38.
The infor informati mation on for prepari preparing ng a trial trial bala balance nce on on a work work sheet sheet is is obtain obtained ed from from b. gener general al ledger ledger accoun accounts. ts.
39. After After the the adjust adjustin ing g entrie entries s are journa journalilized zed and and posted posted to the accoun accounts ts in the general ledger, the balance of each account should agree with the balance shown on the a. adju adjust sted ed tri trial al bal balan ance ce.. 40. 40. If the total total debit debit colu column mn excee exceeds ds the total total cred credit it colum column n of the incom income e statement columns on a work sheet, then the company has c. suffer suffered ed a net net loss loss for for the the per period iod.. 41.
A work work sheet sheet is a multi multiple ple column column form form that that faci facilit litates ates the c. prepar preparati ation on of financ financial ial state statemen ments. ts.
42.
Which Which of the the follow following ing compa companie nies s would would be least least like likely ly to use use a work work sheet sheet to facilitate the adjustment process? d. Small Small comp company any with with few few accou accounts nts
43. 43.
A wor work k she sheet et can can be be tho thoug ught ht of as a(n) a(n) b. option optional al device device used used by by accoun accountan tants. ts.
44.The account, Supplies, will appear in the following debit columns of the work sheet. d. All of of th these 45.When constructing constructing a work sheet, accounts are often needed that are not listed listed in the trial balance already entered on the work sheet from the ledger. Where should these additional accounts be shown on the work sheet? c. Th They ey shou should ld be insert inserted ed on the lines lines immed immedia iate tely ly belo below w the the tria triall balance totals. 46.
When using using a work sheet, sheet, adjust adjusting ing entries entries are journa journaliz lized ed c. after after the work work sheet sheet is completed completed and and after after financial financial stateme statements nts have have been prepared.
47.
Assumi Assuming ng that that there there is a net loss loss for for the peri period, od, debit debits s equal equal credit credits s in all all but which section of the work sheet? a. Incom Income e stat statem ement ent colu column mns s
48. 48.
Adju Adjust stin ing g entr entrie ies s are are prep prepar ared ed fro from m b. the adju adjustm stment ent colu columns mns of of the work work sheet. sheet.
49.
The The net net inco income me (or (or los loss) s) for for the the perio period d c. is found found by computi computing ng the the diffe differe renc nce e betwe between en the the inco income me statem statement ent columns of the work sheet.
50. 50.
The The wor work k she sheet et does does not not sho show w c. the endin ending g balance balance in in the owner' owner's s capita capitall account account..
51.If the total debits exceed total credits in the balance sheet columns of the work sheet, owner's equity d. will will not not be affe affect cted ed..
Use the following information for questions 52–53. The income statement and balance sheet columns of Pine Company's work sheet reflects the following totals: Income Statement Dr. Cr.
Balance Sheet Dr.
Cr. Totals
$58,000
$50,000
$34,000
$42,000
52.
The The net net inc incom ome e (or (or loss loss)) for for the the per perio iod d is is b. $8,0 $8,000 00 incom ncome. e.
53.
To enter enter the the net inc incom ome e (or loss loss)) for the the perio period d into into the above above work work shee sheett requires an entry to the d. balance balance sheet sheet debit debit column column and to the the balance balance sheet sheet credit credit column. column.
54. 54.
Clos Closiing ent entries ries are are mad made e d. so that that financia financiall stateme statements nts can can be prepared. prepared.
55. 55.
Closi osing entr ntries are b. posted posted to the ledger ledger accounts accounts from the the work work sheet. sheet.
56. 56.
The The inc incom ome e summ summar ary y acc accou ount nt b. appea appears rs on on the the balan balance ce shee sheet. t.
57. 57.
If Incom Income e Summa Summary ry has a credi creditt balanc balance e after after revenu revenues es and expen expense ses s have been closed into it, the closing entry for Income Summary will include a c. credit credit to the the owner owner's 's capit capital al accou account. nt.
58.
Clos Closing ing entri entries es are are jour journa nalilize zed d and and post posted ed b. after after the financial financial state statement ments s are prepared prepared..
59.
Closing entries c. cause cause the revenue revenue and and expense expense account accounts s to have have zero balanc balances. es.
60. 60.
Whic Which h of the foll follow owin ing g is a true true stat statem emen entt abou aboutt clos closin ing g the the book books s of a proprietorship? c. Revenu nue es and expens penses es are close losed d to the Inc Incom ome e Sum umm mary ary account.
61. 61.
Clos Closin ing g entr entrie ies s may may be prepa prepare red d from from all all but but whic which h one one of the follo followi wing ng sources? c. Balan lance shee sheett
62.
In ord order er to clos close e the the owner owner's 's dra drawi wing ng acco account unt,, the the d. owner's owner's capital capital account account should should be debited. debited.
63. 63.
In prep prepar arin ing g clo closi sing ng entr entrie ies s b. each each expen expense se accou account nt will will be credite credited. d.
64.
65.
The most most effic efficien ientt way way to accompl accomplish ish closi closing ng entri entries es is is to d. credit credit the income income summary summary accou account nt for total total revenues revenues and and debit the the income summary account for total expenses. The The clos closin ing g entry entry pro proce cess ss con consi sist sts s of clo closi sing ng d. all all tempo tempora rary ry acc accou ount nts. s.
66.
The final final closi closing ng entry entry to be journ journali alized zed is typi typical cally ly the entr entry y that clos closes es the b. own owner er's 's drawi drawing ng accou account. nt.
67.
An erro errorr has has occurr occurred ed in in the clo closi sing ng entr entry y proc proces ess s if d. the balanc balance e sheet sheet accoun accounts ts have have zero zero balance balances. s.
68.
The Income Income Summ Summary ary account account is an impo importan rtantt accou account nt that that is is used used b. in prepa preparin ring g adjus adjusting ting entrie entries. s.
69.
The bala balance nce in in the incom income e summar summary y account account before before itit is clos closed ed will will be equal equal to a. the net income income or loss on the the income income statemen statement. t.
70.
After After closi closing ng entrie entries s are post posted, ed, the balanc balance e in the owner owner's 's capit capital al account account in in the ledger will be equal to b. the amount amount of the the owner's owner's capita capitall reported reported on the the balance balance sheet. sheet.
71.
A pos post-c t-clo losi sing ng tria triall bal balanc ance e wil willl show show b. onl only y tempor temporary ary acco account unt bala balance nces. s.
72.
A post post-c -clo losi sing ng tria triall bala balanc nce e shoul should d be prep prepare ared d b. after after closing closing entries entries are poste posted d to the ledger ledger accounts accounts..
73.
A pos post-c t-clo losi sing ng tria triall bal balanc ance e wil willl show show c. onl only y bala balance nce sheet sheet accou accounts nts..
74.
The The purpo purpose se of of the postpost-cl clos osin ing g tria triall bala balanc nce e is to to b. prove prove the equalit equality y of the balanc balance e sheet sheet accou account nt balance balances s that are carried forward into the next accounting period.
75.
The bala balance nces s that appea appearr on the the post-c post-clos losing ing trial trial balance balance wil willl match match the the b. balance balance sheet sheet account account balanc balances es after after closing closing entries entries..
76.
Which Which accou account nt listed listed below below would would be double double ruled ruled in in the ledge ledgerr as part part of the the closing process? c. Ow Owne ner' r's s Dra Draw wing ing
77.
A double double rule rule appli applied ed to accou accounts nts in in the ledger ledger duri during ng the clos closin ing g proces process s implies that
a. the account account is an income income statemen statementt account account.. 78.
The The headin heading g for a post-c post-clo losi sing ng trial trial bala balanc nce e has a date line line that that is simil similar ar to the one found on a. a bal balan ance ce shee sheet. t.
79.
Whic Which h one of the foll followi owing ng is an opti optiona onall step step in the acco account untin ing g cycle cycle of a business enterprise? b. Prep Prepar are e a wo work rk shee sheett
80.
The The fina finall step step in in the the acco accoun unti ting ng cyc cycle le is is to pre prepar pare e c. a post post-cl -closi osing ng trial trial balanc balance. e.
81.
Whic Which h of the foll follow owin ing g steps steps in the the accou accounti nting ng cycle cycle woul would d not genera generalllly y be performed daily? c. Prepar Prepare e adjus adjustin ting g entrie entries s
82.
Which Which of the the foll followi owing ng steps steps in in the acco accounti unting ng cycle cycle may be be perform performed ed more more frequently than annually? d. Prep Prepar are e a tri trial al bal balan ance ce
83.
Which Which of the the follow following ing depic depicts ts the proper proper sequenc sequence e of steps steps in the the account accounting ing cycle? c. Prepare Prepare a trial trial balance, balance, prepare prepare adjusting adjusting entries, entries, prepare prepare financial financial statements
84. c.
The two optiona optionall steps steps in the the acco accounti unting ng cycl cycle e are are prepar preparing ing reve revers rsin ing g ent entri ries es and and a wo work rk shee sheet. t.
85.
The The firs firstt requi require red d step step in in the acc accoun ounti ting ng cyc cycle le is is c. anal analyz yzin ing g transa transact ctio ions ns..
86. 86.
Spee Speedy dy Bike Bike Compa Company ny rece receiived ved a $640 $640 chec check k from from a cus custome tomerr for for the the balance due. The transaction was erroneously recorded as a debit to Cash $460 and a credit credit to Service Service Revenue $460. The correcting entry is c. Debi Debitt Cash, ash, $180 $180 and and Serv Servic ice e Reve Revenu nue, e, $460 $460;; Cred Credit it Accou ccount nts s Receivable, $640.
87.
If err error ors s occu occurr in the record recordin ing g proc proces ess, s, the they y b. should should be correc corrected ted as as soon as they they are discov discovered ered..
88. 88.
A correctin ting entry c. may may involve involve any any combi combinat nation ion of acco account unts. s.
89.
An una unacc ccep eptab table le way way to to make make a cor corre rect ctin ing g entry entry is is to b. erase erase the incorr incorrect ect entry. entry.
90. 90.
Cole Cole Compa Company ny paid paid the the week weekly ly payro payroll ll on Janua January ry 2 by debit debitin ing g Wage Wages s Expense Expense for $50,000. The accountant preparing the payroll payroll entry overlooked overlooked the fact that Wages Expense of $40,000 had been accrued at year end on December 31. The correcting entry is
c. Wa Wage ges s Paya Payabl ble e ...... ......... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... Wages Expense ..................................................... 40,000 91. 91.
40,0 40,000 00
Tyle Tylerr Compa Company ny paid paid $430 $430 on acco accoun untt to a cred credit itor or.. The The trans transac acti tion on was was erroneously recorded as a debit to Cash of $340 and a credit to Accounts Receivable, $340. The correcting entry is d. Accou ount nts s Receiva eivabl ble e .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Acco Accoun unts ts Pay Payab able le ... ..... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ..... ...... ...... ..... .... Cash .... ...... .... .... .... .... .... .... .... ........ ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ..
340 340 430 430 770
92.
A lawy lawyer er coll collec ected ted $95 $950 0 of legal legal fees fees in adv advan ance ce.. He erro errone neous ously ly deb debit ited ed Cash for $590 and credited credited Accounts Accounts Receivable Receivable for $590. The correcting correcting entry is c. Cash Cash ........................ .................................... ........................ ......................... .................................36 ....................360 0 Acco Accoun unts ts Rec Recei eiva vabl ble e .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ..... ...... ..... .. 590 590 Unearned Rev Revenue ... ............................................... .... 950
93.
Office Office Equipm Equipment ent is classi classifie fied d in the balanc balance e sheet sheet as b. proper property, ty, plan plant, t, and and equip equipmen ment. t.
94.
A cu current as asset is is d. expected expected to be realized realized in cash, cash, sold or consum consumed ed within within one year of of the balanc balance e sheet sheet or the compan company's y's operat operating ing cycle, cycle, wh which ichev ever er is longer.
95. 95.
An intang angible ble asset a. derives derives its value value from from the rights rights and and privilege privileges s it provides provides the the owner. owner.
96.
Liabil Liabiliti ities es are are genera generalllly y class classifi ified ed on a balan balance ce sheet sheet as d. current current liabilities liabilities and long-term long-term liabilities. liabilities.
97.
Which Which of the the foll followi owing ng would would not not be class classifi ified ed a longlong-ter term m liabi liabilit lity? y? a. Curre Current nt matur maturitie ities s of longlong-te term rm debt debt
98. d.
Which Which of the the foll followi owing ng liabi liabilit lities ies are are not not related related to the oper operati ating ng cycle cycle? ? Bonds payable
99. 99.
The The repo report rt form form of the the bala balanc nce e shee sheett c. shows shows assets assets above above liabil liabiliti ities es and owner' owner's s equity. equity.
100. d.
It is not true true that that curre current nt asset assets s are reso resourc urces es that that are are expect expected ed to be be acqu acquiired red wi withi thin one one year ear.
101. 101.
The The operati operating ng cycle cycle of a compa company ny is the aver average age time time that that is requi require red d to go from cash to b. cash cash in in produ produci cing ng reve revenue nues. s.
102.
On a class classifi ified ed balance balance sheet sheet,, current current asse assets ts are cust customar omarilily y listed listed
c. in the order order of liqu liquid idit ity. y. 103. 103.
Inta Intang ngib iblle ass asset ets s are are c. nonc noncur urre rent nt resou resourc rces es..
104.
The relat relation ionshi ship p between between current current asset assets s and curren currentt liabil liabiliti ities es is impor important tant in evaluating a company's b. liquid uidity. ty.
105. 105.
The The most most impor importa tant nt infor informa mati tion on needed needed to determi determine ne if compan companie ies s can can pay their current obligations is the c. relationship relationship between current current assets assets and current current liabiliti liabilities. es.
a
106. 106. A rev rever ersi sing ng entr entry y b. is the the exac exactt op oppo posi site te of an adju adjust stin ing g entr entry y made made in a prev previo ious us period.
a
107. If a compa company ny util utilize izes s revers reversing ing entri entries, es, they they will will a. be made made at the beginn beginning ing of the next next accou accounting nting period. period.
The following questions are from the Study Guide s
108. The steps steps in in the prepara preparatio tion n of a work work sheet sheet do not include a. analyz analyzing ing docu docume menta ntary ry evide evidence nce..
s
109. Balanc Balance e sheet sheet account accounts s are are cons conside idered red to be be b. perm perman anen entt acco accoun unts ts..
s
110. 110.
Incom Income e Summar Summary y has a cred credit it balanc balance e of $12,0 $12,000 00 in J. Spen Spence cer` r` Co. after after closing revenues and expenses. The entry to close Income Summary is is d. debit Income Income Summar Summary y $12,000, $12,000, credit credit J. Spencer Spencer,, Capital Capital $12,000. $12,000.
s
111. The post-cl post-closi osing ng trial trial balanc balance e contai contains ns only only b. bala balanc nce e sheet sheet acco accoun unts ts..
s
112. 112.
Whic Which h one of the follo followi wing ng state stateme ments nts conce concern rnin ing g the the acco accoun unti ting ng cycle cycle is incorrect ? b. The accou accounting nting cycle cycle include includes s only one one optional optional step. step.
s
113. 113.
On Septem Septembe berr 23, the Polar Polar Comp Compan any y receiv received ed a $350 $350 chec check k from Mike Mike Moluf for services services to be performed performed in the future. The bookkeeper bookkeeper for Polar Comp Compan any y inco incorr rrec ectl tly y debi debite ted d Cash Cash for for $350 $350 and and cred credit ited ed Acco Accoun unts ts Receiv Receivable able for for $350. $350. The amount amounts s have have been poste posted d to the ledger ledger.. To correct this entry, the bookkeeper should b. debi debitt Acco Accoun unts ts Rece Receiv ivab able le $350 $350 and and cred credit it Unea Unearn rned ed Serv Servic ice e Revenue $350.
s
114. 114. Curr Curren entt lia liabi bililiti ties es a. must reaso reasonably nably be be expected expected to be be paid from from existing existing curren currentt assets assets or through the creation of other current liabilities.
