Question 1

An after-closing trial balance consists only of asset, liability, and owners' equity accounts.

Accepted Answer

A) True 
 B)False  True

Question 2

What is the balance in Income Summary before it is closed to Retained Earnings?

Accepted Answer

A)  $61. 
B)  $50. 
C)  $73. 
D)  $145. 
A)  $61. 
B)  $50. 
C)  $73. 
D)  $145. A

Question 3

Which of the following is true regarding a worksheet prepared at year-end?

Accepted Answer

A)  The number of account titles applicable to the Adjusted Trial Balance columns is usually greater than the number of account titles applicable to the Trial Balance columns. 
B)  The worksheet can be issued instead of financial statements. 
C)  The worksheet eliminates the need to make adjusting and closing entries. 
D)  An equal number of account titles are applicable to the Income Statement columns and the Balance Sheet columns. 
A)  The number of account titles applicable to the Adjusted Trial Balance columns is usually greater than the number of account titles applicable to the Trial Balance columns. 
B)  The worksheet can be issued instead of financial statements. 
C)  The worksheet eliminates the need to make adjusting and closing entries. 
D)  An equal number of account titles are applicable to the Income Statement columns and the Balance Sheet columns. A

Question 4

In the notes to financial statements, adequate disclosure would typically not include:

Accepted Answer

A)  The accounting methods in use. 
B)  Lawsuits pending against the business. 
C)  Due dates of major liabilities. 
D)  The optimism of the CFO regarding future profits. 
A)  The accounting methods in use. 
B)  Lawsuits pending against the business. 
C)  Due dates of major liabilities. 
D)  The optimism of the CFO regarding future profits.

Question 5

If current assets are $110,000 and current liabilities are $50,000, working capital will be:

Accepted Answer

A)  45.5%. 
B)  2:2. 
C)  $60,000. 
D)  $160,000. 
A)  45.5%. 
B)  2:2. 
C)  $60,000. 
D)  $160,000.

Question 6

The current ratio is a measure of liquidity.

Accepted Answer

A) True 
 B)False

Question 7

Ski West adjusts its accounts at the end of each month, but closes them only at the end of the calendar year (December 31). The ending balances in the Equipment Rental Revenue account and the Cash account in February and March appear below. Ski West prepares financial statements showing separately the operating results of each month. In the financial statements prepared for the month ended March 31, Equipment Rental Revenue and Cash should appear as follows:

Accepted Answer

A)  Equipment Rental Revenue, $18,400; Cash, $26,500. 
B)  Equipment Rental Revenue, $18,400; Cash, $12,300. 
C)  Equipment Rental Revenue, $6,300; Cash, $26,500. 
D)  Equipment Rental Revenue, $6,300; Cash, $12,300. 
A)  Equipment Rental Revenue, $18,400; Cash, $26,500. 
B)  Equipment Rental Revenue, $18,400; Cash, $12,300. 
C)  Equipment Rental Revenue, $6,300; Cash, $26,500. 
D)  Equipment Rental Revenue, $6,300; Cash, $12,300.

Question 8

Closing entries
An Adjusted Trial Balance for Tiger, Inc., at December 31 appears below.
  
Prepare journal entries to close the accounts. Use four entries to: (1) close the revenue account, (2) close the expense accounts, (3) close the Income Summary account, and (4) close the Dividends account.

Accepted Answer

The answer of Closing entries
An Adjusted Trial Balance for Tiger,...

Question 9

Preparation of interim financial statements:

Accepted Answer

A)  Makes the preparation of year-end financial statements unnecessary. 
B)  Requires the journalizing and posting of adjusting entries. 
C)  Requires the journalizing and posting of closing entries. 
D)  Is done monthly or quarterly, in-between the year-end financial statements. 
A)  Makes the preparation of year-end financial statements unnecessary. 
B)  Requires the journalizing and posting of adjusting entries. 
C)  Requires the journalizing and posting of closing entries. 
D)  Is done monthly or quarterly, in-between the year-end financial statements.

Question 10

Income summary does not appear on the income statement.

Accepted Answer

A) True 
 B)False

Question 11

Income Summary appears on which financial statement:

Accepted Answer

A)  Income statement. 
B)  Balance sheet. 
C)  Retained Earnings statement. 
D)  Income summary does not appear on any financial statement. 
A)  Income statement. 
B)  Balance sheet. 
C)  Retained Earnings statement. 
D)  Income summary does not appear on any financial statement.

Question 12

The net income percentage can be measured by dividing net income by total revenue.

Accepted Answer

A) True 
 B)False

Question 13

Which account will appear on an after-closing trial balance?

Accepted Answer

A)  Dividends. 
B)  Prepaid Expenses. 
C)  Retained Earnings, at the beginning of the period. 
D)  Sales. 
A)  Dividends. 
B)  Prepaid Expenses. 
C)  Retained Earnings, at the beginning of the period. 
D)  Sales.

Question 14

If current assets are $180,000 and current liabilities are $130,000, the current ratio will be:

Accepted Answer

A)  72%. 
B)  $50,000. 
C)  1.4. 
D)  $310,000. 
A)  72%. 
B)  $50,000. 
C)  1.4. 
D)  $310,000.

Question 15

A worksheet consists of all of the following except:

Accepted Answer

A)  A trial balance. 
B)  Adjusting entries. 
C)  An adjusted trial balance. 
D)  Transaction entries. 
A)  A trial balance. 
B)  Adjusting entries. 
C)  An adjusted trial balance. 
D)  Transaction entries.

Question 16

Refer to the information above. After closing the accounts, Retained earnings at December 31 equals:

Accepted Answer

A)  Zero. 
B)  $18,400. 
C)  $19,360. 
D)  $16,640. 
A)  Zero. 
B)  $18,400. 
C)  $19,360. 
D)  $16,640.

Question 17

Refer to the information above. The total debits in the After-Closing Trial Balance will equal:

Accepted Answer

A)  $23,500. 
B)  $31,000. 
C)  $50,750. 
D)  $58,250. 
A)  $23,500. 
B)  $31,000. 
C)  $50,750. 
D)  $58,250.

Question 18

Which statement is true regarding the Income Statement?

Accepted Answer

A)  Losses do not appear on income statements. 
B)  Dividends reduce net income. 
C)  Dividends declared increase net income. 
D)  Both losses and gains appear on an income statement. 
A)  Losses do not appear on income statements. 
B)  Dividends reduce net income. 
C)  Dividends declared increase net income. 
D)  Both losses and gains appear on an income statement.

Question 19

Closing entries do not affect the cash account.

Accepted Answer

A) True 
 B)False

Question 20

The income summary account has debits of $85,000 and credits of $75,000. The company had which of the following:

Accepted Answer

A)  Net income of $10,000. 
B)  Net income of $160,000. 
C)  Net loss of $10,000. 
D)  Net loss of $160,000. 
A)  Net income of $10,000. 
B)  Net income of $160,000. 
C)  Net loss of $10,000. 
D)  Net loss of $160,000.

Exam 5: The Accounting Cycle: Reporting Financial Results

An after-closing trial balance consists only of asset, liability, and owners' equity accounts.

What is the balance in Income Summary before it is closed to Retained Earnings?

Which of the following is true regarding a worksheet prepared at year-end?

In the notes to financial statements, adequate disclosure would typically not include:

If current assets are $110,000 and current liabilities are $50,000, working capital will be:

The current ratio is a measure of liquidity.

Closing entries An Adjusted Trial Balance for Tiger, Inc., at December 31 appears below. Prepare journal entries to close the accounts. Use four entries to: (1) close the revenue account, (2) close the expense accounts, (3) close the Income Summary account, and (4) close the Dividends account.

Preparation of interim financial statements:

Income summary does not appear on the income statement.

Income Summary appears on which financial statement:

The net income percentage can be measured by dividing net income by total revenue.

Which account will appear on an after-closing trial balance?

If current assets are $180,000 and current liabilities are $130,000, the current ratio will be:

A worksheet consists of all of the following except:

Refer to the information above. After closing the accounts, Retained earnings at December 31 equals:

Refer to the information above. The total debits in the After-Closing Trial Balance will equal:

Which statement is true regarding the Income Statement?

Closing entries do not affect the cash account.

The income summary account has debits of $85,000 and credits of $75,000. The company had which of the following:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

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