Question 1

The following information is available for the Higgins Travel Agency. After closing entries are posted, what will be the balance in the C. Higgins, Capital account?   Net Income $42,500 C. Higgins, Capital 130,000 C. Higgins, Withdrawals 12,000\begin{array}{lr}	ext { Net Income } & \$ 42,500 \	ext { C. Higgins, Capital } & 130,000\	ext { C. Higgins, Withdrawals }&12,000\end{array} Net Income  C. Higgins, Capital  C. Higgins, Withdrawals ​$42,500130,00012,000​

Accepted Answer

A)  $99,500.
B)  $130,000.
C)  $75,500.
D)  $184,500.
E)  $160,500.

Question 2

Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

Accepted Answer

A)  Debit T. Westmont, Capital $297,000; credit Income Summary $297,000
B)  Debit Income Summary $63,300; credit T. Westmont, Capital $63,300
C)  Debit T. Westmont, Capital $81,300; credit Income Summary $81,300
D)  Debit T. Westmont, Capital $63,300; credit Income Summary $63,300
E)  Debit Income Summary $81,300, credit T. Westmont, Capital $81,300

Question 3

All necessary amounts to prepare the balance sheet, including ending owner's capital, can be found in the Balance Sheet columns of the work sheet.

Accepted Answer

A) True 
 B)False

Question 4

The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital?   J. Brendon, Capital $112,000 J. Brendon, Withdrawals 32,000 Fees earned 187,000 Depreciation Expense-Equipment 12,000 Wages expense 71,400 Interest expense 3,300 Insurance expense 11,700 Rent expense 24,200\begin{array} { | l | r | } \hline 	ext { J. Brendon, Capital } & \$ 112,000 \\hline 	ext { J. Brendon, Withdrawals } & 32,000 \\hline 	ext { Fees earned } & 187,000 \\hline 	ext { Depreciation Expense-Equipment } & 12,000 \\hline 	ext { Wages expense } & 71,400 \\hline 	ext { Interest expense } & 3,300 \\hline 	ext { Insurance expense } & 11,700 \\hline 	ext { Rent expense } & 24,200 \\hline\end{array} J. Brendon, Capital  J. Brendon, Withdrawals  Fees earned  Depreciation Expense-Equipment  Wages expense  Interest expense  Insurance expense  Rent expense ​$112,00032,000187,00012,00071,4003,30011,70024,200​​

Accepted Answer

A)  $80,000.
B)  $32,400.
C)  $42,400.
D)  $43,000.
E)  $64,400.

Question 5

Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:

Accepted Answer

A)  Balance sheet accounts.
B)  Temporary accounts.
C)  Real accounts.
D)  Permanent accounts.
E)  Closing accounts.

Question 6

An unclassified balance sheet provides more information to users than a classified balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

Accepted Answer

A) True 
 B)False

Question 8

Flo's Flowers' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Flo's can cover its short term liabilities with its short term assets.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is classified as a plant asset?

Accepted Answer

A)  Office equipment.
B)  Merchandise inventory.
C)  Patent.
D)  Office supplies.
E)  Cash.

Question 10

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Accepted Answer

A)  The difference between the totals of the Income Statement columns is net income or net loss.
B)  The balances in the Income Statement debit column are expenses.
C)  The balances in the Income Statement credit column are unearned revenues.
D)  The balances in the Income Statement credit column are revenues.
E)  The net income or net loss from the Income Statement columns is entered in the Balance Sheet & Statement of Owner's Equity columns.

Question 11

Closing entries are required:

Accepted Answer

A)  If the temporary accounts are to reflect correct amounts for each accounting period.
B)  Only if the company adheres to the accrual method of accounting.
C)  If a company's bookkeeper does not choose to prepare reversing entries.
D)  If management has decided to cease operating the business.
E)  In order to satisfy the Internal Revenue Service guidelines.

Question 12

The closing process takes place before financial statements have been prepared.

Accepted Answer

A) True 
 B)False

Question 13

The current ratio:

Accepted Answer

A)  Is used to help assess a company's ability to pay its debts in the near future.
B)  Is used to measure a company's profitability.
C)  Measures the effect of operating income on profit.
D)  Is used to measure the relation between assets and long-term debt.
E)  Is calculated by dividing current assets by equity.

Question 14

Assets are often classified into current assets, long-term investments, plant assets, and intangible assets.

Accepted Answer

A) True 
 B)False

Question 15

Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

Accepted Answer

A) True 
 B)False

Question 16

A classified balance sheet differs from an unclassified balance sheet in that

Accepted Answer

A)  An unclassified balance sheet is never used by large companies.
B)  A classified balance sheet presents information in a manner that makes it easier to calculate a company's current ratio.
C)  A classified balance sheet groups items into the broad categories of asset, liability, and equity.
D)  A classified balance sheet will include more accounts than an unclassified balance sheet for the same company on the same date.
E)  A classified balance sheet is not usually provided to outside parties.

Question 17

Which of the following statements is true?

Accepted Answer

A)  A post-closing trial balance should include only permanent accounts.
B)  Closing entries are only necessary if errors have been made.
C)  By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts.
D)  Owner's capital must be closed each accounting period.
E)  The work sheet can be substituted for preparing financial statements.

Question 18

List the steps in the accounting cycle.

Accepted Answer

The accounting cycle consists of ten ste...

Question 19

After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.

Accepted Answer

A) True 
 B)False

Question 20

After posting the entries to close all revenue and expense accounts, Marker Company's Income Summary account has a credit balance of $6,000, and its Marker, Withdrawals account has a debit balance of $2,500. These balances indicate that net income for the current accounting period amounted to $3,500.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

An unclassified balance sheet provides more information to users than a classified balance sheet.

Correct Answer
verified

Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

Correct Answer
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Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:

Correct Answer
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List the steps in the accounting cycle.

Correct Answer
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The accounting cycle consists of ten ste...
View Answer

Flo's Flowers' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Flo's can cover its short term liabilities with its short term assets.

Correct Answer
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A classified balance sheet differs from an unclassified balance sheet in that

Correct Answer
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Correct Answer
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Which of the following statements is true?

Correct Answer
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All of the following statements regarding the Income Statement columns on the worksheet are true except:

Correct Answer
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Closing entries are required:

Correct Answer
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Correct Answer
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Correct Answer
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The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

Correct Answer
verified

Assets are often classified into current assets, long-term investments, plant assets, and intangible assets.

Correct Answer
verified

The current ratio:

Correct Answer
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After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.

Correct Answer
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Correct Answer
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Which of the following is classified as a plant asset?

Correct Answer
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The closing process takes place before financial statements have been prepared.

Correct Answer
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All necessary amounts to prepare the balance sheet, including ending owner's capital, can be found in the Balance Sheet columns of the work sheet.

Correct Answer
verified

Exam 4: Completing the Accounting Cycle

An unclassified balance sheet provides more information to users than a classified balance sheet.

Correct AnswerverifiedShow Answer

Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

Correct AnswerverifiedShow Answer

Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:

Correct AnswerverifiedShow Answer

List the steps in the accounting cycle.

Correct AnswerverifiedThe accounting cycle consists of ten ste...View AnswerShow Answer

Flo's Flowers' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Flo's can cover its short term liabilities with its short term assets.

Correct AnswerverifiedShow Answer

A classified balance sheet differs from an unclassified balance sheet in that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Correct AnswerverifiedShow Answer

Closing entries are required:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

Correct AnswerverifiedShow Answer

Assets are often classified into current assets, long-term investments, plant assets, and intangible assets.

Correct AnswerverifiedShow Answer

The current ratio:

Correct AnswerverifiedShow Answer

After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is classified as a plant asset?

Correct AnswerverifiedShow Answer

The closing process takes place before financial statements have been prepared.

Correct AnswerverifiedShow Answer

All necessary amounts to prepare the balance sheet, including ending owner's capital, can be found in the Balance Sheet columns of the work sheet.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
The accounting cycle consists of ten ste...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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