Question 1

Income Summary will have what balance before it is closed?

Accepted Answer

A) Zero. 
B) $11,750. 
C) $ 7,250. 
D) $11,000. 
A) Zero. 
B) $11,750. 
C) $ 7,250. 
D) $11,000. D

Question 2

Which account appears on the After-Closing Trial Balance?

Accepted Answer

A) Service Revenue 
B) Unearned Revenue 
C) Dividends 
D) Retained Earnings,Beginning of Year 
A) Service Revenue 
B) Unearned Revenue 
C) Dividends 
D) Retained Earnings,Beginning of Year B

Question 3

The normal order in which the financial statements are prepared is:

Accepted Answer

A) Balance sheet,income statement,statement of retained earnings. 
B) Income statement,statement of retained earnings,balance sheet. 
C) Income tax return,income statement,balance sheet. 
D) Income statement,annual report,balance sheet. 
A) Balance sheet,income statement,statement of retained earnings. 
B) Income statement,statement of retained earnings,balance sheet. 
C) Income tax return,income statement,balance sheet. 
D) Income statement,annual report,balance sheet. B

Question 4

If a business closes its accounts only at year-end:

Accepted Answer

A) Financial statements are prepared only at year-end. 
B) Adjusting entries are made only at year-end. 
C) Revenue and expense accounts reflect year-to-date amounts throughout the year. 
D) Monthly and quarterly financial statements cannot be prepared. 
A) Financial statements are prepared only at year-end. 
B) Adjusting entries are made only at year-end. 
C) Revenue and expense accounts reflect year-to-date amounts throughout the year. 
D) Monthly and quarterly financial statements cannot be prepared.

Question 5

After closing the accounts,Retained Earnings at December 31 equals:

Accepted Answer

A) $11,000. 
B) $7,250. 
C) Zero. 
D) $22,250. 
A) $11,000. 
B) $7,250. 
C) Zero. 
D) $22,250.

Question 6

Publicly-owned companies are:

Accepted Answer

A) Managed and owned by the government. 
B) Must be not-for-profit companies. 
C) Usually listed on a stock exchange. 
D) Not permitted to be owned by individuals. 
A) Managed and owned by the government. 
B) Must be not-for-profit companies. 
C) Usually listed on a stock exchange. 
D) Not permitted to be owned by individuals.

Question 7

Net income from the Income Statement appears on:

Accepted Answer

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

Question 8

The following information is available:   What is the return on equity? (Round your answer to the nearest whole number. )

Accepted Answer

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

Question 9

During the closing process:

Accepted Answer

A) All income statement accounts are credited to income summary. 
B) All income statement accounts are debited to income summary. 
C) All revenue accounts are credited and expense accounts are debited. 
D) All revenue accounts are debited and expense accounts are credited. 
A) All income statement accounts are credited to income summary. 
B) All income statement accounts are debited to income summary. 
C) All revenue accounts are credited and expense accounts are debited. 
D) All revenue accounts are debited and expense accounts are credited.

Question 10

Return on equity measures:

Accepted Answer

A) Solvency. 
B) Profitability. 
C) Leverage. 
D) Both solvency and leverage. 
A) Solvency. 
B) Profitability. 
C) Leverage. 
D) Both solvency and leverage.

Question 11

An annual report filed with the Securities and Exchange Commission must include a section called "Management Discussion and Analysis" (MD&A).

Accepted Answer

A) True 
 B)False

Question 12

At year-end,all equity accounts must be closed.

Accepted Answer

A) True 
 B)False

Question 13

Only two adjustments appear in the adjustments column of a worksheet for Winona Mfg: one to record $8,000 depreciation of factory equipment,and the other to record the use of $1,500 of prepaid insurance.If the Trial Balance column totals are $145,380,what are the totals of the Adjusted Trial Balance columns?

Accepted Answer

A) $145,380 
B) $153,380 
C) $152,880 
D) $154,880 
A) $145,380 
B) $153,380 
C) $152,880 
D) $154,880

Question 14

Adequate disclosure
(a)Briefly explain what is meant by the principle of adequate disclosure.
(b)How does professional judgment enter into the application of the principle of adequate disclosure?
(c)List 5 types of information that a publicly held corporation generally would be required to provide according to the concept of adequate disclosure.

Accepted Answer

(a)The principle of adequate disclosure

Question 15

The amount of net income will appear on the debit side of the Income Statement columns in a worksheet if:

Accepted Answer

A) Revenue exceeds total expenses for the period. 
B) The trial balance is out of balance. 
C) Dividends are more than the income or loss for the period. 
D) There is a net loss for the period. 
A) Revenue exceeds total expenses for the period. 
B) The trial balance is out of balance. 
C) Dividends are more than the income or loss for the period. 
D) There is a net loss for the period.

Question 16

The adequacy of a company's disclosure is based on:

Accepted Answer

A) Laws established by Congress. 
B) IRS rules and FASB requirements. 
C) A combination of official rules,tradition,and professional judgment. 
D) The needs of stockholders and creditors. 
A) Laws established by Congress. 
B) IRS rules and FASB requirements. 
C) A combination of official rules,tradition,and professional judgment. 
D) The needs of stockholders and creditors.

Question 17

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.

Question 18

Which of the following accounts will be closed to Income Summary?

Accepted Answer

A) Prepaid Expenses. 
B) Unearned Revenue. 
C) Dividends. 
D) Depreciation Expense. 
A) Prepaid Expenses. 
B) Unearned Revenue. 
C) Dividends. 
D) Depreciation Expense.

Question 19

Closing entries would be prepared before:

Accepted Answer

A) The opening balance sheet is prepared. 
B) The after-closing trial balance. 
C) An adjusted trial balance. 
D) Adjusting entries. 
A) The opening balance sheet is prepared. 
B) The after-closing trial balance. 
C) An adjusted trial balance. 
D) Adjusting entries.

Question 20

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.

Exam 5: The Accounting Cycle: Reporting Financial Results

Income Summary will have what balance before it is closed?

Which account appears on the After-Closing Trial Balance?

The normal order in which the financial statements are prepared is:

If a business closes its accounts only at year-end:

After closing the accounts,Retained Earnings at December 31 equals:

Publicly-owned companies are:

Net income from the Income Statement appears on:

The following information is available: What is the return on equity? (Round your answer to the nearest whole number. )

During the closing process:

Return on equity measures:

An annual report filed with the Securities and Exchange Commission must include a section called "Management Discussion and Analysis" (MD&A).

At year-end,all equity accounts must be closed.

The amount of net income will appear on the debit side of the Income Statement columns in a worksheet if:

The adequacy of a company's disclosure is based on:

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

Which of the following accounts will be closed to Income Summary?

Closing entries would be prepared before:

After closing the accounts,Retained Earnings at December 31 equals:

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

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

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters