Question 1

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 2

When closing the accounts at the end of the period,which of the following is closed directly into the Retained Earnings account?

Accepted Answer

A) Depreciation Expense. 
B) Accumulated Depreciation. 
C) Revenue and liability accounts. 
D) The Income Summary account. 
A) Depreciation Expense. 
B) Accumulated Depreciation. 
C) Revenue and liability accounts. 
D) The Income Summary account.

Question 3

An annual report:

Accepted Answer

A) Must be audited by the IRS. 
B) Is delivered to stockholders and the public on the last day of the fiscal year. 
C) Includes comparative financial statements for several years. 
D) Must be filed with the SEC by all companies in the United States. 
A) Must be audited by the IRS. 
B) Is delivered to stockholders and the public on the last day of the fiscal year. 
C) Includes comparative financial statements for several years. 
D) Must be filed with the SEC by all companies in the United States.

Question 4

The total debits in the After Closing-Trial Balance will equal:

Accepted Answer

A) $23,360. 
B) $28,640. 
C) $22,400. 
D) $6,720. 
A) $23,360. 
B) $28,640. 
C) $22,400. 
D) $6,720.

Question 5

The current ratio equals current assets plus current liabilities.

Accepted Answer

A) True 
 B)False

Question 6

A revenue account is closed by debiting Income Summary and crediting Service Revenue.

Accepted Answer

A) True 
 B)False

Question 7

If current assets are $90,000 and current liabilities are $70,000,the current ratio will be:

Accepted Answer

A) 77%. 
B) $20,000. 
C) 1.3. 
D) $160,000. 
A) 77%. 
B) $20,000. 
C) 1.3. 
D) $160,000.

Question 8

After preparing the financial statements for the current year,the accountant for Exquisite Gems closed the Dividends account at year-end by debiting Income Summary and crediting the Dividends account.What is the effect of this entry on current-year net income and the balance in the Retained Earnings account at year-end?

Accepted Answer

A) Net income is overstated and the balance in the Retained Earnings account is correct. 
B) Net income is correct and the balance in the Retained Earnings account is overstated. 
C) Net income is understated and the balance in the Retained Earnings account is correct. 
D) Net income is understated and the balance in the Retained Earnings account is overstated. 
A) Net income is overstated and the balance in the Retained Earnings account is correct. 
B) Net income is correct and the balance in the Retained Earnings account is overstated. 
C) Net income is understated and the balance in the Retained Earnings account is correct. 
D) Net income is understated and the balance in the Retained Earnings account is overstated.

Question 9

Indicate which of the following accounts will be closed to Income Summary at year-end.
(a)Cash
(b)Office Supplies Expense
(c)Unexpired Insurance
(d)Unearned Revenue
(e)Dividends
(f)Depreciation Expense
(g)Income Taxes Payable
(h)Accumulated Depreciation

Accepted Answer

(b)Office Supplies Expense and

Question 10

The income statement,statement of retained earnings,and the balance can all be prepared directly from the Management's Discussion and Analysis.

Accepted Answer

A) True 
 B)False

Question 11

Dividends will have what effect upon retained earnings?

Accepted Answer

A) Increase. 
B) Decrease. 
C) No effect. 
D) Depends upon if there is income or loss. 
A) Increase. 
B) Decrease. 
C) No effect. 
D) Depends upon if there is income or loss.

Question 12

The Financial Accounting Standards Board (FASB)maintains and periodically updates a well-defined list of disclosure items that companies must include in their annual reports.

Accepted Answer

A) True 
 B)False

Question 13

Interim financial statements:

Accepted Answer

A) Cover a period less than one year. 
B) Cover only periods of one quarter (of a year). 
C) Cover periods greater than a year. 
D) Cannot cover a period of one month or less. 
A) Cover a period less than one year. 
B) Cover only periods of one quarter (of a year). 
C) Cover periods greater than a year. 
D) Cannot cover a period of one month or less.

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

The worksheet:

Accepted Answer

A) Is one of the basic financial statements. 
B) Is prepared throughout the year. 
C) Is not a formal step in the accounting cycle. 
D) Starts with the first column being the adjusted trial balance. 
A) Is one of the basic financial statements. 
B) Is prepared throughout the year. 
C) Is not a formal step in the accounting cycle. 
D) Starts with the first column being the adjusted trial balance.

Question 16

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) Customers that account for 10 percent or more of the company's revenues. 
D) The optimism of the CFO regarding future profits. 
A) The accounting methods in use. 
B) Lawsuits pending against the business. 
C) Customers that account for 10 percent or more of the company's revenues. 
D) The optimism of the CFO regarding future profits.

Question 17

Most disclosures appear within the body of the financial statements;however,a few disclosures may also appear in the notes that accompany the financial statements.

Accepted Answer

A) True 
 B)False

Question 18

The income summary account appears on the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 19

Which account will not appear on an After-Closing Trial Balance?

Accepted Answer

A) Dividends 
B) Prepaid Expenses 
C) Unearned Revenue 
D) Retained Earnings,at the end of the period 
A) Dividends 
B) Prepaid Expenses 
C) Unearned Revenue 
D) Retained Earnings,at the end of the period

Question 20

Companies need not disclose information that may have a damaging effect on the business,such as product liability lawsuits.

Accepted Answer

A) True 
 B)False

Exam 5: The Accounting Cycle: Reporting Financial Results

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

When closing the accounts at the end of the period,which of the following is closed directly into the Retained Earnings account?

An annual report:

The total debits in the After Closing-Trial Balance will equal:

The current ratio equals current assets plus current liabilities.

A revenue account is closed by debiting Income Summary and crediting Service Revenue.

If current assets are $90,000 and current liabilities are $70,000,the current ratio will be:

Indicate which of the following accounts will be closed to Income Summary at year-end. (a)Cash (b)Office Supplies Expense (c)Unexpired Insurance (d)Unearned Revenue (e)Dividends (f)Depreciation Expense (g)Income Taxes Payable (h)Accumulated Depreciation

The income statement,statement of retained earnings,and the balance can all be prepared directly from the Management's Discussion and Analysis.

Dividends will have what effect upon retained earnings?

The Financial Accounting Standards Board (FASB)maintains and periodically updates a well-defined list of disclosure items that companies must include in their annual reports.

Interim financial statements:

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

The worksheet:

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

Most disclosures appear within the body of the financial statements;however,a few disclosures may also appear in the notes that accompany the financial statements.

The income summary account appears on the statement of retained earnings.

Which account will not appear on an After-Closing Trial Balance?

Companies need not disclose information that may have a damaging effect on the business,such as product liability lawsuits.

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