Question 1

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

Accepted Answer

A)  zero. 
B)  $14,500. 
C)  $22,000. 
D)  $22,500. 
A)  zero. 
B)  $14,500. 
C)  $22,000. 
D)  $22,500.

Question 2

The accounts and their amounts for Belgrave Co. at December 31, 20__ are listed below. Prepare closing entries and an After-Closing Trial Balance.
 $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & \$ 5,300 & \
\hline \text { Accounts Receivable } & 5,850 & \
\hline \text { Supplies } & 360 & \
\hline \text { Prepaid Insurance } & 700 & \
\hline \text { Machinery } & 2,600 & \
\hline \text { Accumulated Depr. Mach. } & & 1,650 \
\hline \text { Salary Payable } & & 400 \
\hline \text { Capital Stock } & & 5,200 \
\hline \text { Retained Earnings } & & 1,940 \
\hline \text { Dividends } & 500 & \
\hline \text { Revenue } & & 13,250 \
\hline \text { Insurance Expense } & 120 & \
\hline \text { Salary Expense } & 6,210 & \
\hline \text { Miscellaneous Expense } & 340 & \
\hline \text { Depreciation Expense } & 460 & \
\hline \text { Totals } & \$ 22,440 & \$ 22,440 \
\hline
\end{array}$$

Accepted Answer

After-Clos

Question 3

If sales are $540,000, expenses are $440,000 and dividends are $50,000, Income Summary:

Accepted Answer

A)  Will have a credit balance of $50,000. 
B)  Will have a debit balance of $50,000. 
C)  Will have a debit balance of $100,000. 
D)  Will have a credit balance of $100,000. 
A)  Will have a credit balance of $50,000. 
B)  Will have a debit balance of $50,000. 
C)  Will have a debit balance of $100,000. 
D)  Will have a credit balance of $100,000.

Question 4

Dividends are closed out directly to retained earnings at year-end.

Accepted Answer

A) True 
 B)False

Question 5

Closing entries would be prepared before:

Accepted Answer

A)  Financial statements are prepared. 
B)  A post-closing trial balance. 
C)  An adjusted trial balance. 
D)  Adjusting entries. 
A)  Financial statements are prepared. 
B)  A post-closing trial balance. 
C)  An adjusted trial balance. 
D)  Adjusting entries.

Question 6

Publicly traded companies must file audited financial statements with the:

Accepted Answer

A)  AICPA. 
B)  IRS. 
C)  SEC. 
D)  AAA. 
A)  AICPA. 
B)  IRS. 
C)  SEC. 
D)  AAA.

Question 7

The concept of adequate disclosure:

Accepted Answer

A)  Does not apply to information which is immaterial. 
B)  Grants users of the financial statements access to a company's accounting records. 
C)  Does not apply to events occurring after the balance sheet date. 
D)  Specifies which accounting methods must be used in a company's financial statements. 
A)  Does not apply to information which is immaterial. 
B)  Grants users of the financial statements access to a company's accounting records. 
C)  Does not apply to events occurring after the balance sheet date. 
D)  Specifies which accounting methods must be used in a company's financial statements.

Question 8

Closing entries never involve posting a credit to the:

Accepted Answer

A)  Income Summary account. 
B)  Accumulated Depreciation account. 
C)  Dividends. 
D)  Depreciation Expense account. 
A)  Income Summary account. 
B)  Accumulated Depreciation account. 
C)  Dividends. 
D)  Depreciation Expense account.

Question 9

The following information is available: What is the return on equity? (round to the nearest number)

Accepted Answer

A)  5%. 
B)  15%. 
C)  20%. 
D)  25%. 
A)  5%. 
B)  15%. 
C)  20%. 
D)  25%.

Question 10

When a worksheet is prepared, which account would not be entered into the income statement columns?

Accepted Answer

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

Question 11

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

Accepted Answer

A)  $25,375. 
B)  $29,125. 
C)  $40,875. 
D)  $18,125. 
A)  $25,375. 
B)  $29,125. 
C)  $40,875. 
D)  $18,125.

Question 12

The report form of the balance sheet lists liabilities and owners' equity below assets.

Accepted Answer

A) True 
 B)False

Question 13

The concept of adequate disclosure requires a company to inform financial statement users of each of the following, except:

Accepted Answer

A)  The accounting methods in use. 
B)  The due dates of major liabilities. 
C)  Destruction of a large portion of the company's inventory on January 20, three weeks after the balance sheet date, but prior to issuance of the financial statements. 
D)  Income projections for the next five years based upon anticipated market share of a new product; the new product was introduced a few days before the balance sheet date. 
A)  The accounting methods in use. 
B)  The due dates of major liabilities. 
C)  Destruction of a large portion of the company's inventory on January 20, three weeks after the balance sheet date, but prior to issuance of the financial statements. 
D)  Income projections for the next five years based upon anticipated market share of a new product; the new product was introduced a few days before the balance sheet date.

Question 14

Net income from the Income Statement appears on:

Accepted Answer

A)  The Balance Sheet. 
B)  The Retained Earnings Statement. 
C)  Neither the Balance Sheet nor the Retained Earnings Statement. 
D)  Both the Balance Sheet and the Retained Earnings Statement. 
A)  The Balance Sheet. 
B)  The Retained Earnings Statement. 
C)  Neither the Balance Sheet nor the Retained Earnings Statement. 
D)  Both the Balance Sheet and the Retained Earnings Statement.

Question 15

The current ratio is a measure of short-term debt paying ability.

Accepted Answer

A) True 
 B)False

Question 16

A worksheet should be viewed as:

Accepted Answer

A)  A financial statement to be distributed to investors. 
B)  A financial statement to assist managers in making managerial decisions. 
C)  A tool to assist accountants in making end-of-period adjustments and in preparing financial statements. 
D)  A tool to assist auditors in determining that all transactions have been properly recorded throughout the period. 
A)  A financial statement to be distributed to investors. 
B)  A financial statement to assist managers in making managerial decisions. 
C)  A tool to assist accountants in making end-of-period adjustments and in preparing financial statements. 
D)  A tool to assist auditors in determining that all transactions have been properly recorded throughout the period.

Exam 5: The Accounting Cycle: Reporting Financial Results

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

If sales are $540,000, expenses are $440,000 and dividends are $50,000, Income Summary:

Dividends are closed out directly to retained earnings at year-end.

Closing entries would be prepared before:

Publicly traded companies must file audited financial statements with the:

The concept of adequate disclosure:

Closing entries never involve posting a credit to the:

The following information is available: What is the return on equity? (round to the nearest number)

When a worksheet is prepared, which account would not be entered into the income statement columns?

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

The report form of the balance sheet lists liabilities and owners' equity below assets.

The concept of adequate disclosure requires a company to inform financial statement users of each of the following, except:

Net income from the Income Statement appears on:

The current ratio is a measure of short-term debt paying ability.

A worksheet should be viewed as:

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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