Question 1

Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Question 2

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

Accepted Answer

A)  Income statement columns
B)  Adjustments columns
C)  Trial balance columns
D)  Adjusted trial balance columns

Question 3

Which one of the following is an optional step in the accounting cycle of a business enterprise?

Accepted Answer

A)  Analyze business transactions
B)  Prepare a worksheet
C)  Prepare a trial balance
D)  Post to the ledger accounts

Question 4

The operating cycle of a company is the average time required to collect the receivables resulting from producing revenues.

Accepted Answer

A) True 
 B)False

Question 5

What is total equity and liabilities at December 31, 2011?

Accepted Answer

A)  ¥176,000
B)  ¥190,000
C)  ¥218,000
D)  ¥232,000

Question 6

At January 1, 2011, Poole reported Retained Earnings of $50,000.Dividends for the year totalled $10,000.At December 31, 2011, the company will report Retained Earnings of

Accepted Answer

A)  $13,500.
B)  $36,500.
C)  $40,000.
D)  $43,500.

Question 7

The entry to close the expense accounts includes a

Accepted Answer

A)  debit to Income Summary for $3,500.
B)  credit to Income Summary for $3,500.
C)  debit to Income Summary for $73,500.
D)  debit to Wages Expense for $2,500.

Question 8

If the total debits exceed total credits in the statement of financial position columns of the worksheet, equity

Accepted Answer

A)  will increase because net income has occurred.
B)  will decrease because a net loss has occurred.
C)  is in error because a mistake has occurred.
D)  will not be affected.

Question 9

The most efficient way to accomplish closing entries is to

Accepted Answer

A)  credit the income summary account for each revenue account balance.
B)  debit the income summary account for each expense account balance.
C)  credit the dividends account balance directly to the income summary account.
D)  credit the income summary account for total revenues and debit the income summary account for total expenses.

Question 10

The adjustments entered in the adjustments columns of a worksheet are

Accepted Answer

A)  not journalized.
B)  posted to the ledger but not journalized.
C)  not journalized until after the financial statements are prepared.
D)  journalized before the worksheet is completed.

Question 11

The income summary account

Accepted Answer

A)  is a permanent account.
B)  appears on the statement of financial position.
C)  appears on the income statement.
D)  is a temporary account.

Question 12

Preparing a worksheet involves

Accepted Answer

A)  two steps.
B)  three steps.
C)  four steps.
D)  five steps.

Question 13

The balances that appear on the post-closing trial balance will match the

Accepted Answer

A)  income statement account balances after adjustments.
B)  statement of financial position account balances after closing entries.
C)  income statement account balances after closing entries.
D)  statement of financial position account balances after adjustments.

Question 14

Closing entries are journalized and posted

Accepted Answer

A)  before the financial statements are prepared.
B)  after the financial statements are prepared.
C)  at management's discretion.
D)  at the end of each interim accounting period.

Question 15

To enter the net income (or loss)  for the period into the above worksheet requires an entry to the

Accepted Answer

A)  income statement debit column and the statement of financial position credit column.
B)  income statement credit column and the statement of financial position debit column.
C)  income statement debit column and the income statement credit column.
D)  statement of financial position debit column and the statement of financial position credit column.

Question 16

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

Accepted Answer

A) True 
 B)False

Question 17

Liabilities are generally classified on a statement of financial position as

Accepted Answer

A)  small liabilities and large liabilities.
B)  present liabilities and future liabilities.
C)  tangible liabilities and intangible liabilities.
D)  current liabilities and non-current liabilities.

Question 18

Closing the Dividends account to Retained Earnings is not necessary if net income is greater than dividends paid during the period.

Accepted Answer

A) True 
 B)False

Question 19

The Dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Accepted Answer

A) True 
 B)False

Question 20

Correcting entries are made

Accepted Answer

A)  at the beginning of an accounting period.
B)  at the end of an accounting period.
C)  whenever an error is discovered.
D)  after closing entries.

Exam 4: Completing the Accounting Cycle

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

Correct AnswerverifiedShow Answer

Closing entries are journalized and posted

Correct AnswerverifiedShow Answer

Closing the Dividends account to Retained Earnings is not necessary if net income is greater than dividends paid during the period.

Correct AnswerverifiedShow Answer

Correcting entries are made

Correct AnswerverifiedShow Answer

The operating cycle of a company is the average time required to collect the receivables resulting from producing revenues.

Correct AnswerverifiedShow Answer

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

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The adjustments entered in the adjustments columns of a worksheet are

Correct AnswerverifiedShow Answer

The income summary account

Correct AnswerverifiedShow Answer

What is total equity and liabilities at December 31, 2011?

Correct AnswerverifiedShow Answer

The Dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Correct AnswerverifiedShow Answer

Liabilities are generally classified on a statement of financial position as

Correct AnswerverifiedShow Answer

To enter the net income (or loss) for the period into the above worksheet requires an entry to the

Correct AnswerverifiedShow Answer

The balances that appear on the post-closing trial balance will match the

Correct AnswerverifiedShow Answer

Which one of the following is an optional step in the accounting cycle of a business enterprise?

Correct AnswerverifiedShow Answer

Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.

Correct AnswerverifiedShow Answer

Preparing a worksheet involves

Correct AnswerverifiedShow Answer

At January 1, 2011, Poole reported Retained Earnings of $50,000.Dividends for the year totalled $10,000.At December 31, 2011, the company will report Retained Earnings of

Correct AnswerverifiedShow Answer

The entry to close the expense accounts includes a

Correct AnswerverifiedShow Answer

If the total debits exceed total credits in the statement of financial position columns of the worksheet, equity

Correct AnswerverifiedShow Answer

The most efficient way to accomplish closing entries is to

Correct AnswerverifiedShow Answer

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