Question 1

Closing entries

Accepted Answer

A)  are prepared before the financial statements.
B)  reduce the number of permanent accounts.
C)  cause the revenue and expense accounts to have zero balances.
D)  summarize the activity in every account.E) None of the above
F) A) and D)

Question 2

When using a work sheet, adjusting entries are journalized

Accepted Answer

A)  after the work sheet is completed and before financial statements are prepared.
B)  before the adjustments are entered onto the work sheet.
C)  after the work sheet is completed and after financial statements have been prepared.
D)  before the adjusted trial balance is extended to the proper financial statement columns.E) B) and C)
F) All of the above

Question 3

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 4

A liability is classified as a current liability if it is to be paid from current assets within the next year or operating cycle, whichever is longer.

Accepted Answer

A) True 
 B)False

Question 5

The information for preparing a trial balance on a work sheet is obtained from

Accepted Answer

A)  financial statements.
B)  general ledger accounts.
C)  general journal entries.
D)  business documents.E) C) and D)
F) B) and D)

Question 6

Closing entries are journalized after adjusting entries have been journalized.

Accepted Answer

A) True 
 B)False

Question 7

The ______________ of a company is the average length of time that is required to go from cash to cash in producing revenues.

Accepted Answer

The answer of The ______________ of a company is the...

Question 8

An error has occurred in the closing entry process if

Accepted Answer

A)  revenue and expense accounts have zero balances.
B)  the Retained Earnings account is credited for the amount of net income.
C)  the Dividends account is closed to the Retained Earnings account.
D)  the balance sheet accounts have zero balances.E) All of the above
F) A) and C)

Question 9

Liabilities are generally classified on a balance sheet 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 long-term liabilities.E) B) and C)
F) A) and D)

Question 10

The first step in preparing a work sheet is to prepare a ______________ from the general ledger accounts.

Accepted Answer

The answer of The first step in preparing a work...

Question 11

The balance in the Income Summary account before it is closed will be equal to

Accepted Answer

A)  the net income or loss on the income statement.
B)  the beginning balance in the Retained Earnings account.
C)  the ending balance in the Retained Earnings account.
D)  zero.E) C) and D)
F) A) and B)

Question 12

Closing entries are

Accepted Answer

A)  an optional step in the accounting cycle.
B)  posted to the ledger accounts from the work sheet.
C)  made to close permanent or real accounts.
D)  journalized in the general journal.E) B) and C)
F) A) and D)

Question 13

The four major classifications of assets in a classified balance sheet are: _______________, _______________, _______________ and _______________.

Accepted Answer

Current Assets; Long...

Question 14

Closing entries are made

Accepted Answer

A)  in order to terminate the business as an operating entity.
B)  so that all assets, liabilities, and stockholders' equity accounts will have zero balances when the next accounting period starts.
C)  in order to transfer net income (or loss)  and dividends to the Retained Earnings account.
D)  so that financial statements can be prepared.E) None of the above
F) A) and B)

Question 15

An intangible asset

Accepted Answer

A)  derives its value from the rights and privileges it provides the owner.
B)  is worthless because it has no physical substance.
C)  is converted into a tangible asset during the operating cycle.
D)  cannot be classified on the balance sheet because it lacks physical substance.E) A) and D)
F) B) and C)

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

The purpose of the post-closing trial balance is to

Accepted Answer

A)  prove that no mistakes were made.
B)  prove the equality of the balance sheet account balances that are carried forward into the next accounting period.
C)  prove the equality of the income statement account balances that are carried forward into the next accounting period.
D)  list all the balance sheet accounts in alphabetical order for easy reference.E) A) and C)
F) A) and B)

Question 18

If total credits in the income statement columns of a work sheet exceed total debits, the enterprise has net income.

Accepted Answer

A) True 
 B)False

Question 19

The report form of the balance sheet

Accepted Answer

A)  is identical to the account form.
B)  lists the asset section to the left and the liabilities and stockholders' equity sections to the right.
C)  shows assets above liabilities and stockholders' equity.
D)  lists assets to the left, liabilities in the middle, and stockholders' equity to the right.E) A) and D)
F) B) and C)

Question 20

A post-closing trial balance will show

Accepted Answer

A)  only permanent account balances.
B)  only temporary account balances.
C)  zero balances for all accounts.
D)  the amount of net income (or loss)  for the period.E) C) and D)
F) A) and D)

Exam 5: Completion of Theaccounting Cycle

Closing entries are journalized after adjusting entries have been journalized.

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The purpose of the post-closing trial balance is to

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The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

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The ______________ of a company is the average length of time that is required to go from cash to cash in producing revenues.

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The first step in preparing a work sheet is to prepare a ______________ from the general ledger accounts.

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A post-closing trial balance will show

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An intangible asset

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The report form of the balance sheet

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Liabilities are generally classified on a balance sheet as

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If total credits in the income statement columns of a work sheet exceed total debits, the enterprise has net income.

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

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Closing entries are

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An error has occurred in the closing entry process if

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When using a work sheet, adjusting entries are journalized

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Closing entries are made

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A liability is classified as a current liability if it is to be paid from current assets within the next year or operating cycle, whichever is longer.

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The four major classifications of assets in a classified balance sheet are: _______________, _______________, _______________ and _______________.

Correct AnswerverifiedCurrent Assets; Long...View AnswerShow Answer

The balance in the Income Summary account before it is closed will be equal to

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Closing entries

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The information for preparing a trial balance on a work sheet is obtained from

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The four major classifications of assets in a classified balance sheet are: _______, _, _ and _______.

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Current Assets; Long...
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