skip to Main Content

ACC 100 Week 5 Quiz Chapter 4 – Strayer Latest

4 – 2

Test Bank for Accounting Principles, Eleventh Edition

4 – 3

Completing the Accounting Cycle

CHAPTER 4

COMPLETING THE ACCOUNTING CYCLE

Summary of Questions by Learning Objectives and Bloom’s Taxonomy

Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT
Item
LO
BT

True-False Statements

1. 1 K 9. 2 K 17. 4 K 25. 6 C sg33. 2 K
2. 1 K 10. 2 K 18. 4 C 26. 6 K sg34. 3 K
3. 1 C 11. 2 K 19. 5 C 27. 6 K sg35. 6 C
4. 1 C 12. 2 K 20. 5 K 28. 6 K sg36. 6 K
5. 1 K 13. 2 K 21. 5 C 29. 6 K sg37. 6 K
6. 1 K 14. 2 K 22. 6 K a30. 7 K
7. 1 C 15. 3 C 23. 6 C sg31. 1 K
8. 2 K 16. 3 K 24. 6 C sg32. 2 K

Multiple Choice Questions

38. 1 K 66. 2 K 94. 3 C 122. 6 AN 150. 6 AP
39. 1 K 67. 2 K 95. 3 C 123. 6 AN 151. 6 AP
40. 1 K 68. 2 C 96. 3 C 124. 6 K a152. 7 K
41. 1 C 69. 2 K 97. 4 K 125. 6 K a153. 7 K
42. 1 C 70. 2 K 98. 4 K 126. 6 C sg154. 1 C
43. 1 K 71. 2 C 99. 4 K 127. 6 K sg155. 2 K
44. 1 C 72. 2 K 100. 4 K 128. 6 K sg156. 2 K
45. 1 K 73. 2 K 101. 4 K 129. 6 C sg157. 3 K
46. 1 K 74. 2 C 102. 4 K 130. 6 C st158. 4 K
47. 1 K 75. 2 C 103. 4 K 131. 6 K sg159. 4 K
48. 1 K 76. 2 C 104. 4 K 132. 6 K st160. 5 K
49. 1 K 77. 2 C 105. 4 K 133. 6 K sg161. 5 AN
50. 1 K 78. 2 C 106. 5 K 134. 6 K st162. 6 K
51. 1 C 79. 2 AN 107. 5 AN 135. 6 K sg163. 6 K
52. 1 K 80. 2 C 108. 5 K 136. 6 K st,a164. 7 K
53. 1 C 81. 2 C 109. 5 C 137. 6 K 165. 8 K
54. 1 AP 82. 2 C 110. 5 K 138. 6 C 166. 8 K
55. 1 C 83. 2 C 111. 5 AN 139. 1 AN 167. 8 K
56. 2 K 84. 2 AN 112. 5 AN 140. 6 AN 168. 8 K
57. 2 K 85. 2 C 113. 5 AN 141. 6 AN 169. 8 K
58. 2 K 86. 2 C 114. 5 AN 142. 6 AN 170. 8 K
59. 2 K 87. 3 K 115. 5 AN 143. 6 AN 171. 8 K
60. 2 K 88. 3 C 116. 6 AN 144. 6 AN 172. 8 K
61. 2 K 89. 3 K 117. 6 AN 145. 6 AN 173. 8 K
62. 2 K 90. 3 K 118. 6 AN 146. 6 K 174. 8 K
63. 2 K 91. 3 K 119. 6 AN 147. 6 K 175. 8 K
64. 2 K 92. 3 K 120. 6 AN 148. 6 K
65. 2 K 93. 3 K 121. 6 AN 149. 6 K

sg This question also appears in the Study Guide.

st This question also appears in a self-test at the student companion website.

a This question covers a topic in an appendix to the chapter.

Summary of Questions by Learning Objectives and Bloom’s Taxonomy

Brief Exercises

176. 2 AN 179. 2 K 182. 5 AN 185. 6 AP
177. 2 AN 180. 3 K 183. 6 AN 186. 6 K
178. 2 AN 181. 5 AN 184. 6 AP a187. 7 AP

Exercises

188. 1 C 194. 1,6 AP 200. 2 AP 206. 5 AN 212. 6 AP
189. 1 C 194. 2 AN 201. 3 C 207. 5 AN a213. 7 AN
190. 1 AN 196. 2 AP 202. 3 AN 208. 5 AN a214. 7 AN
191. 1 AN 197. 2 AP 203. 4 C 209. 6 AP a215. 7 AN
192. 1 AN 198. 2 AP 204. 5 AN 210. 6 AN
193. 1 AN 199. 2 AP 205. 5 AN 211. 6 AP

Completion Statements

216. 1 K 219.. 2 K 222. 4 K 225. 6 K
217. 1 K 220. 2 K 223. 6 K 226. 6 K
218. 2 K 221. 3 K 224. 6 K 227. 6 K
Matching
228. 1-7 K
Short-Answer Essay
229. 1 K 231. 6 K a233. 7 K 225. 5 K
230. 2 K 232. 6 K 234. 5 K

SUMMARY OF Learning OBJECTIVES BY QUESTION TYPE

Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Learning Objective 1
1. TF 7. TF 42. MC 48. MC 54. MC 190. Ex 217. C
2. TF 31. TF 43. MC 49. MC 55. MC 191. Ex 228. MA
3. TF 38. MC 44. MC 50. MC 139. MC 192. Ex 229. SA
4. TF 39. MC 45. MC 51. MC 154. MC 193. Ex
5. TF 40. MC 46. MC 52. MC 188. Ex 194. Ex
6. TF 41. MC 47. MC 53. MC 189. Ex 216. C
Learning Objective 2
8. TF 33. TF 63. MC 71. MC 79. MC 155. MC 197. Ex
9. TF 56. MC 64. MC 72. MC 80. MC 156. MC 198. Ex
10. TF 57. MC 65. MC 73. MC 81. MC 176. BE 199. Ex
11. TF 58. MC 66. MC 74. MC 82. MC 177. BE 200. Ex
12. TF 59. MC 67. MC 75. MC 83. MC 178. BE 218. C
13. TF 60. MC 68. MC 76. MC 84. MC 179. BE 219/220. C
14. TF 61. MC 69. MC 77. MC 85. MC 195. Ex 228. MA
32. TF 62. MC 70. MC 78. MC 86. MC 196. Ex 230. SA
Learning Objective 3
15. TF 87. MC 90. MC 93. MC 96. MC 201. Ex 228. MA
16. TF 88. MC 91. MC 94. MC 157. MC 202. Ex
34. TF 89. MC 92. MC 95. MC 180. BE 221. C

SUMMARY OF Learning OBJECTIVES BY QUESTION TYPE

Learning Objective 4
17. TF 98. MC 101. MC 104. MC 159. MC 228. MA
18. TF 99. MC 102. MC 105. MC 203. Ex
97. MC 100. MC 103. MC 158. MC 222. C
Learning Objective 5
19. TF 107. MC 111. MC 115. MC 182. BE 207. Ex 235. SA
20. TF 108. MC 112. MC 160. MC 204. Ex 208. Ex
21. TF 109. MC 113. MC 161. MC 205. Ex 228. MA
106. MC 110. MC 114. MC 181. BE 206. Ex 234. SA
Learning Objective 6
22. TF 37. TF 125. MC 135. MC 145. MC 184. BE 225. C
23. TF 116. MC 126. MC 136. MC 146. MC 185. BE 226. C
24. TF 117. MC 127. MC 137. MC 147. MC 186. BE 227. C
25. TF 118. MC 128. MC 138. MC 148. MC 183. Ex 228. MA
26. TF 119. MC 129. MC 149. MC 209. Ex 231. SA
27. TF 120. MC 130. MC 140. MC 150. MC 210. Ex 232. SA
28. TF 121. MC 131. MC 141. MC 151. MC 211. Ex
29. TF 122. MC 132. MC 142. MC 162. MC 212. Ex
35. TF 123. MC 133. MC 143. MC 163. MC 223. C
36. TF 124. MC 134. MC 144. MC 183. BE 224. C
Learning Objective a7
a30. TF a153. MC a167. MC a213. Ex a215. Ex 228. MA
a152. MC a164. MC a187. BE a214. Ex 233. SA
Learning Objective a8
a165. MC a167. MC a169. MC a171. MC a173. MC a175. MC
a166. MC a168. MC a170. MC a172. MC a174. MC

Note: TF = True-False BE = Brief Exercise C = Completion

MC = Multiple Choice Ex = Exercise MA = Matching

SA = Short-Answer Essay

CHAPTER Learning OBJECTIVES

1. Prepare a worksheet. The steps in preparing a worksheet follows. (a) Prepare a trial balance on the worksheet, (b) Enter the adjustments in the adjustments columns, (c) Enter adjusted balances in the adjusted trial balance columns, (d) Extend adjusted trial balance amounts to appropriate financial statement columns, and (e) Total the statement columns, compute net income (or net loss), and complete the worksheet.

2. Explain the process of closing the books. Closing the books occurs at the end of an accounting period. The process is to journalize and post closing entries and then underline and balance all accounts. In closing the books, companies make separate entries to close revenues and expenses to Income Summary, Income Summary to Owner’s Capital, and Owner’s Drawings to Owner’s Capital. Only temporary accounts are closed.

3. Describe the content and purpose of a post-closing trial balance. A post-closing trial balance contains the balances in permanent accounts that are carried forward to the next accounting period. The purpose of this trial balance is to prove the equality of these balances.

4. State the required steps in the accounting cycle. The required steps in the accounting cycle are (1) analyze business transactions, (2) journalize the transactions, (3) post to ledger accounts, (4) prepare a trial balance, (5) journalize and post adjusting entries, (6) prepare an adjusted trial balance, (7) prepare financial statements, (8) journalize and post closing entries, and (9) prepare a post-closing trial balance.

5. Explain the approaches to preparing correcting entries. One way to determine the correcting entry is to compare the incorrect entry with the correct entry. After comparison, the company makes a correcting entry to correct the accounts. An alternative to a correcting entry is to reverse the incorrect entry and then prepare the correct entry.

6. Identify the sections of a classified balance sheet. A classified balance sheet categorizes assets as current assets; long-term investments; property, plant, and equipment; and intangibles. Liabilities are classified as either current or long-term. There is also an owner’s (owners’) equity section, which varies with the form of business organization.

a7. Prepare reversing entries. Reversing entries are the opposite of the adjusting entries made in the preceding period. Some companies choose to make reversing entries at the beginning of a new accounting period to simplify the recording of later transactions related to the adjusting entries. In most cases, only accrued adjusting entries are reversed.

TRUE-FALSE STATEMENTS

1. A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet.

Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

2. If a worksheet is used, financial statements can be prepared before adjusting entries are journalized.

Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

3. If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income.

Ans: T, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

4. It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet.

Ans: F, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

5. The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

6. The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns.

Ans: F, SO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem LOlving, IMA: FSA

7. The balance of the depreciation expense account will appear in the income statement debit column of a worksheet.

Ans: T, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

8. Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

9. The owner’s drawings account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

10. After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

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

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

12. Closing the drawings account to Owner’s Capital is not necessary if net income is greater than owner’s drawings during the period.

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

13. The owner’s drawings account is a permanent account whose balance is carried forward to the next accounting period.

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

14. Closing entries are journalized after adjusting entries have been journalized.

Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

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

Ans: F, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

16. The post-closing trial balance is entered in the first two columns of a worksheet.

Ans: F, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

17. A business entity has only one accounting cycle over its economic existence.

Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

18. The accounting cycle begins at the start of a new accounting period.

Ans: T, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

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

Ans: F, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

20. Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.

Ans: T, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

21. 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.

Ans: F, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

22. In a corporation, Retained Earnings is a part of owners’ equity.

Ans: T, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

23. A company’s operating cycle and fiscal year are usually the same length of time.

Ans: F, LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

24. Cash and supplies are both classified as current assets.

Ans: T, LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

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

Ans: F, LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

26. A liability is classified as a current liability if the company is to pay it within the forthcoming year.

Ans: T, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

27. A company’s liquidity is concerned with the relationship between long-term investments and long-term debt.

Ans: F, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: Problem Solving, IMA: Business Economics

28. Current assets are customarily the first items listed on a classified balance sheet.

Ans: T, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

29. The operating cycle of a company is determined by the number of years the company has been operating.

Ans: F, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

a30. Reversing entries are an optional bookkeeping procedure.

Ans: T, LO: 7, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

31. After a worksheet has been completed, the statement columns contain all data that are required for the preparation of financial statements.

Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

32. To close net income to owner’s capital, Income Summary is debited and Owner’s Capital is credited.

Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

33. In one closing entry, Owner’s Drawings is credited and Income Summary is debited.

Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

34. The post-closing trial balance will contain only owner’s equity statement accounts and balance sheet accounts.

Ans: F, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

35. The operating cycle of a company is the average time required to collect the receivables resulting from producing revenues.

Ans: F, LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Business Economics

36. Current assets are listed in the order of liquidity.

Ans: T, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

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

Ans: T, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

Answers to True-False Statements

Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans.
1. F 7. T 13. F 19. F 25. F 31. T 37. T
2. T 8. F 14. T 20. T 26. T 32. T
3. T 9. F 15. F 21. F 27. F 33. F
4. F 10. T 16. F 22. T 28. T 34. F
5. F 11. F 17. F 23. F 29. F 35. F
6. F 12. F 18. T 24. T a30. T 36. T

MULTIPLE CHOICE QUESTIONS

38. Preparing a worksheet involves

a. two steps.

b. three steps.

c. four steps.

d. five steps.

Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

39. The adjustments entered in the adjustments columns of a worksheet are

a. not journalized.

b. posted to the ledger but not journalized.

c. not journalized until after the financial statements are prepared.

d. journalized before the worksheet is completed.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

40. The information for preparing a trial balance on a worksheet is obtained from

a. financial statements.

b. general ledger accounts.

c. general journal entries.

d. business documents.

Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

41. After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the

a. adjusted trial balance.

b. post-closing trial balance.

c. the general journal.

d. adjustments columns of the worksheet.

Ans: A, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

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

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.

Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

43. A worksheet is a multiple column form that facilitates the

a. identification of events.

b. measurement process.

c. preparation of financial statements.

d. analysis process.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

44. Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

a. Large company with numerous accounts

b. Small company with numerous accounts

c. All companies, since worksheets are required under generally accepted accounting principles

d. Small company with few accounts

Ans: D, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

45. A worksheet can be thought of as a(n)

a. permanent accounting record.

b. optional device used by accountants.

c. part of the general ledger.

d. part of the journal.

Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

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

a. Trial balance

b. Adjusted trial balance

c. Balance sheet

d. All of these answer choices are correct

Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

47. 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?

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.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

48. When using a worksheet, adjusting entries are journalized

a. after the worksheet is completed and before financial statements are prepared.

b. before the adjustments are entered on to the worksheet.

c. after the worksheet is completed and after financial statements have been prepared.

d. before the adjusted trial balance is extended to the proper financial statement columns.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

49. Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

a. Income statement columns

b. Adjustments columns

c. Trial balance columns

d. Adjusted trial balance columns

Ans: A, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

50. Adjusting entries are prepared from

a. source documents.

b. the adjustments columns of the worksheet.

c. the general ledger.

d. last year’s worksheet.

Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

51. The net income (or loss) for the period

a. is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.

b. cannot be found on the worksheet.

c. is found by computing the difference between the income statement columns of the worksheet.

d. is found by computing the difference between the trial balance totals and the adjusted trial balance totals.

Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

52. The worksheet does not show

a. net income or loss for the period.

b. revenue and expense account balances.

c. the ending balance in the owner’s capital account.

d. the trial balance before adjustments.

Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

53. If the total debits exceed total credits in the balance sheet columns of the worksheet, owner’s equity

a. will increase because net income has occurred.

b. will decrease because a net loss has occurred.

c. is in error because a mistake has occurred.

d. will not be affected.

Ans: A, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

54. The income statement and balance sheet columns of Iron and Wine Company’s worksheet reflect the following totals:

Income Statement Balance Sheet

Dr. Cr. Dr. Cr.

Totals $72,000 $44,000 $60,000 $88,000

The net income (or loss) for the period is

a. $44,000 income.

b. $28,000 income.

c. $28,000 loss.

d. not determinable.

Ans: C, LO: 1, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

55. The income statement and balance sheet columns of Iron and Wine Company’s worksheet reflect the following totals:

Income Statement Balance Sheet

Dr. Cr. Dr. Cr.

Totals $72,000 $48,000 $60,000 $84,000

To enter the net income (or loss) for the period into the above worksheet requires an entry to the

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.

Ans: B, LO: 1, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

56. Closing entries are necessary for

a. permanent accounts only.

b. temporary accounts only.

c. both permanent and temporary accounts.

d. permanent or real accounts only.

Ans: B, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

57. Each of the following accounts is closed to Income Summary except

a. Expenses.

b. Owner’s Drawings.

c. Revenues.

d. All of these are closed to Income Summary.

Ans: B, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

58. Closing entries are made

a. in order to terminate the business as an operating entity.

b. so that all assets, liabilities, and owner’s capital accounts will have zero balances when the next accounting period starts.

c. in order to transfer net income (or loss) and owner’s drawings to the owner’s capital account.

d. so that financial statements can be prepared.

Ans: C, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

59. Closing entries are

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.

Ans: D, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

60. The income summary account

a. is a permanent account.

b. appears on the balance sheet.

c. appears on the income statement.

d. is a temporary account.

Ans: D, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

61. If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a

a. debit to the owner’s capital account.

b. debit to the owner’s drawings account.

c. credit to the owner’s capital account.

d. credit to the owner’s drawings account.

Ans: C, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

GET HELP WITH THIS PAPER TODAY

Do you need help working on this assignment? We will write a custom essay on this or any other topic specifically for you.

Back To Top