Question 1

Liquidity is a measure of how:

Accepted Answer

A) quickly an asset may be converted into cash. 
B) long an asset can be used. 
C) easily an asset can be exchanged for another asset. 
D) short an operating cycle is. 
A) quickly an asset may be converted into cash. 
B) long an asset can be used. 
C) easily an asset can be exchanged for another asset. 
D) short an operating cycle is.

Question 2

Permanent accounts are not closed at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 3

The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance in the Capital was $90,000.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following accounts would appear in the income statement credit column?

Accepted Answer

A) Service Revenue 
B) Prepaid Insurance 
C) Unearned Service Revenue 
D) Depreciation Expense 
A) Service Revenue 
B) Prepaid Insurance 
C) Unearned Service Revenue 
D) Depreciation Expense

Question 5

Which of the following is an example of an intangible asset?

Accepted Answer

A) Equipment 
B) Plant 
C) Property 
D) Copyright 
A) Equipment 
B) Plant 
C) Property 
D) Copyright

Question 6

Under which of the following categories would Accounts Payable appear?

Accepted Answer

A) Long-term assets 
B) Current assets 
C) Long-term liabilities 
D) Current liabilities 
A) Long-term assets 
B) Current assets 
C) Long-term liabilities 
D) Current liabilities

Question 7

In an accounting cycle, an analysis of transactions is performed at the end of each accounting period.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following accounts will be closed by debiting the Income Summary account?

Accepted Answer

A) Depreciation Expense 
B) Accounts Payable 
C) Service Revenue 
D) Accumulated Depreciation 
A) Depreciation Expense 
B) Accounts Payable 
C) Service Revenue 
D) Accumulated Depreciation

Question 9

Asset and liability accounts are closed to the Income Summary account.

Accepted Answer

A) True 
 B)False

Question 10

The Net Income of Sarah for the year is $25,000. The withdrawals Sarah made during the year amounted to $30,000. Which of the following statements is true of effect of these transactions on Sarah, Capital?

Accepted Answer

A) Sarah, Capital account decreases by $25,000. 
B) Sarah, Capital account decreases by $5,000. 
C) Sarah, Capital account increases by $30,000. 
D) Sarah, Capital account increases by $25,000. 
A) Sarah, Capital account decreases by $25,000. 
B) Sarah, Capital account decreases by $5,000. 
C) Sarah, Capital account increases by $30,000. 
D) Sarah, Capital account increases by $25,000.

Question 11

Salaries Payable, Interest Payable, and Unearned Revenue are examples of:

Accepted Answer

A) short-term investments. 
B) fixed assets. 
C) current liabilities. 
D) long-term liabilities. 
A) short-term investments. 
B) fixed assets. 
C) current liabilities. 
D) long-term liabilities.

Question 12

The Salaries Payable account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 13

The current ratio is calculated using the values from the income statement.

Accepted Answer

A) True 
 B)False

Question 14

Calculate the current ratio using the following information:

Accepted Answer

A) 1.92 
B) 2.43 
C) 1.55 
D) 1.68 
A) 1.92 
B) 2.43 
C) 1.55 
D) 1.68

Question 15

Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?

Accepted Answer

A) Debit Insurance Expense and credit Income Summary 
B) Debit Insurance Expense and credit Owner's Name, Capital 
C) Debit Owner's Name, Capital and credit Insurance Expense 
D) Debit Income Summary and credit Insurance Expense 
A) Debit Insurance Expense and credit Income Summary 
B) Debit Insurance Expense and credit Owner's Name, Capital 
C) Debit Owner's Name, Capital and credit Insurance Expense 
D) Debit Income Summary and credit Insurance Expense

Question 16

Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet.

Accepted Answer

A) True 
 B)False

Question 17

The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance in the Capital account was $86,000.

Accepted Answer

A) True 
 B)False

Question 18

The Service Revenue account is a permanent account.

Accepted Answer

A) True 
 B)False

Question 19

In an accounting cycle, which of the following steps takes place only at the end of the accounting period?

Accepted Answer

A) Start with the beginning account balances. 
B) Journalize transactions that occur. 
C) Analyze transactions as they occur. 
D) Journalize adjusting entries. 
A) Start with the beginning account balances. 
B) Journalize transactions that occur. 
C) Analyze transactions as they occur. 
D) Journalize adjusting entries.

Question 20

In which of the columns of the worksheet would Net Income be found?

Accepted Answer

A) Under the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column 
B) Under the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column 
C) Under the balance sheet debit column and the income statement credit column 
D) Under the balance sheet credit column and the income statement debit column 
A) Under the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column 
B) Under the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column 
C) Under the balance sheet debit column and the income statement credit column 
D) Under the balance sheet credit column and the income statement debit column

Exam 4: Completing the Accounting Cycle

Liquidity is a measure of how:

Permanent accounts are not closed at the end of the accounting period.

The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance in the Capital was $90,000.

Which of the following accounts would appear in the income statement credit column?

Which of the following is an example of an intangible asset?

Under which of the following categories would Accounts Payable appear?

In an accounting cycle, an analysis of transactions is performed at the end of each accounting period.

Which of the following accounts will be closed by debiting the Income Summary account?

Asset and liability accounts are closed to the Income Summary account.

The Net Income of Sarah for the year is $25,000. The withdrawals Sarah made during the year amounted to $30,000. Which of the following statements is true of effect of these transactions on Sarah, Capital?

Salaries Payable, Interest Payable, and Unearned Revenue are examples of:

The Salaries Payable account is a permanent account.

The current ratio is calculated using the values from the income statement.

Calculate the current ratio using the following information:

Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?

Net income is entered as the balancing amount on the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet.

The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance in the Capital account was $86,000.

The Service Revenue account is a permanent account.

In an accounting cycle, which of the following steps takes place only at the end of the accounting period?

In which of the columns of the worksheet would Net Income be found?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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