Question 1

The heading for a post-closing trial balance has a date line that is similar to the one found on

Accepted Answer

A)  a balance sheet.
B)  an income statement.
C)  a retained earnings statement.
D)  the worksheet.

Question 2

The following information is for Bright Eyes Auto Supplies:  The total dollar amount of assets to be classified as property, plant, and equipment is

Accepted Answer

A)  $390,000.
B)  $450,000.
C)  $570,000.
D)  $630,000.

Question 3

The use of reversing entries

Accepted Answer

A)  is a required step in the accounting cycle.
B)  changes the amounts reported in the financial statements.
C)  simplifies the recording of subsequent transactions.
D)  is required for all adjusting entries.

Question 4

The subtotal net assets is used in

Accepted Answer

A)  both GAAP and IFRS.
B)  GAAP but not IFRS.
C)  IFRS but not GAAP.
D)  neither IFRS nor GAAP.

Question 5

Which statement about long-term investments is not true?

Accepted Answer

A)  They will be held for more than one year.
B)  They are not currently used in the operation of the business.
C)  They include investments in stock of other companies and land held for future use.
D)  They can never include cash accounts.

Question 6

If a company utilizes reversing entries, they will

Accepted Answer

A)  be made at the beginning of the next accounting period.
B)  not actually be posted to the general ledger accounts.
C)  be made before the post-closing trial balance.
D)  be part of the adjusting entry process.

Question 7

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

Accepted Answer

A) True 
 B)False

Question 8

In a corporation, Retained Earnings is a part of stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 9

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information:  The entry to close Income Summary to Retained Earnings includes

Accepted Answer

A)  a debit to Revenues for $7,000.
B)  credits to Expenses totalling $5,700.
C)  a credit to Income Summary for $1,300
D)  a credit to Retained Earnings for $1,300.

Question 10

The most efficient way to accomplish closing entries is to

Accepted Answer

A)  credit the income summary account for each revenue account balance.
B)  debit the income summary account for each expense account balance.
C)  credit the dividends balance directly to the income summary account.
D)  credit the income summary account for total revenues and debit the income summary account for total expenses.

Question 11

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

Accepted Answer

A)  $140,000.
B)  $220,000.
C)  $360,000.
D)  $500,000.

Question 12

A double rule applied to accounts in the ledger during the closing process implies that

Accepted Answer

A)  the account is a temporary account.
B)  the account is a balance sheet account.
C)  the account balance is not zero.
D)  a mistake has been made, since double ruling is prescribed.

Question 13

The post-closing trial balance contains only

Accepted Answer

A)  income statement accounts.
B)  balance sheet accounts.
C)  balance sheet and income statement accounts.
D)  income statement, balance sheet, and retained earnings statement accounts.

Question 14

What is the order in which assets are generally listed on a classified balance sheet?

Accepted Answer

A)  Current and long-term
B)  Current; property, plant, and equipment; long-term investments; intangible assets
C)  Current; property, plant, and equipment; intangible assets; long-term investments
D)  Current; long-term investments; property, plant, and equipment; intangible assets

Question 15

Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

Accepted Answer

A) True 
 B)False

Question 17

The income statement for the year 2015 of Fugazi Co. contains the following information:  After all closing entries have been posted, the revenue account will have a balance of

Accepted Answer

A)  $0.
B)  $70,000 credit.
C)  $70,000 debit.
D)  $7,500 credit.

Question 18

Current liabilities are obligations that the company is to pay within the coming year.

Accepted Answer

A) True 
 B)False

Question 19

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

Accepted Answer

A) True 
 B)False

Question 20

The income statement for the year 2015 of Fugazi Co. contains the following information:  At January 1, 2015, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2015, the company will report retained earnings of

Accepted Answer

A)  $17,500.
B)  $32,500.
C)  $40,000.
D)  $42,500.

Exam 4: Completing the Accounting Cycle

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

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The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as property, plant, and equipment is

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

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The income statement for the year 2015 of Fugazi Co. contains the following information: After all closing entries have been posted, the revenue account will have a balance of

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The use of reversing entries

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Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

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Which statement about long-term investments is not true?

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The heading for a post-closing trial balance has a date line that is similar to the one found on

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Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

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If a company utilizes reversing entries, they will

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The most efficient way to accomplish closing entries is to

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Current liabilities are obligations that the company is to pay within the coming year.

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The post-closing trial balance contains only

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The subtotal net assets is used in

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In a corporation, Retained Earnings is a part of stockholders' equity.

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Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

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What is the order in which assets are generally listed on a classified balance sheet?

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The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes

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A double rule applied to accounts in the ledger during the closing process implies that

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The income statement for the year 2015 of Fugazi Co. contains the following information: At January 1, 2015, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2015, the company will report retained earnings of

Correct AnswerverifiedShow Answer

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