Assignment
The order of the steps to prepare the worksheet are __________.
A. prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the respective totals to the Income Statement and Balance Sheet columns | |
B. complete the adjustments, prepare the adjusted trial balance, prepare the trial balance, extend the respective totals to the Income Statement and Balance Sheet columns | |
C. extend the totals to the Income Statement and Balance Sheet columns, prepare the trial balance, complete the adjustments, prepare the adjusted trial balance | |
D. prepare the adjusted trial balance, complete the adjustments, prepare the trial balance, extend the respective totals to the Income Statement and Balance Sheet columns |
If Prepaid Rent for the period is not adjusted __________.
A. assets will be overstated and expenses will be overstated | |
B. assets will be overstated and expenses will be understated | |
C. assets will be understated and expenses will be overstated | |
D. assets will be understated and expenses will be understated
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When historical cost is used to record equipment, it would appear as the __________.
A. original cost on the balance sheet | |
B. residual value on the income statement | |
C. residual value on the balance sheet | |
D. original cost on the income statement |
The entry to record the expiration of part of the prepaid rent will __________.
A. decrease total assets and increase total expenses at the end of the month | |
B. decrease total assets and decrease total expenses at the end of the month | |
C. increase total assets and increase total expenses at the end of the month | |
D. increase total assets and decrease total expenses at the end of the month |
The adjusted trial balance columns __________.
A. help to ensure the ledger is still in balance | |
B. help to identify any errors that may have been made during adjustment | |
C. show updated account balances to aid in preparation of the financial statements | |
D. All of the above answers are correct. |
If the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for Supplies would be __________.
A. $450 | |
B. $550 | |
C. $350 | |
D. $900 |
If the Supplies account is not adjusted __________.
A. assets will be overstated and expenses will be understated | |
B. assets will be overstated and expenses will be overstated | |
C. assets will be understated and expenses will be overstated | |
D. assets will be understated and expenses will be understated |
An adjustment for Prepaid Rent would indicate __________.
A. the amount originally paid | |
B. the amount expired | |
C. the amount on hand | |
D. the amount of the trial balance |
Which of the following would cause total assets to decrease and total expense to increase?
A. recording the depreciation of equipment | |
B. recording the consumption of supplies | |
C. recording the expiration of prepaid rent | |
D. All of the above would have that effect. |
The adjustment to record supplies used during the period would be __________.
A. debit Supplies; credit Supplies Expense | |
B. debit Supplies Expense; credit Cash | |
C. debit Supplies Expense; credit Supplies | |
D. debit Supplies; credit Cash |
Which of the following would cause a contra-asset to be credited and an expense debited?
A. recording an accrued expense | |
B. recording the consumption of supplies | |
C. recording the building depreciation | |
D. All of the above would have that effect. |
As Prepaid Rent is used, the asset becomes a(n. __________.
A. liability | |
B. expense | |
C. contra-asset | |
D. revenue |
Bringing account balances up to date before preparing financial reports is called __________.
A. posting | |
B. adjusting | |
C. journalizing | |
D. analyzing |
It's the end of the accounting period and no electric bill has been received (but the expense has been incurred.; you should record an entry that __________.
A. increases the total assets and increases the total expenses | |
B. decreases the total assets and increases the total expenses | |
C. increases the total liabilities and increases the total expenses | |
D. decreases the total liabilities and increases the total expenses |
If the adjustment for Supplies used during the period was not made __________.
A. expenses would be too low | |
B. assets would be too low | |
C. expenses would be too high | |
D. revenue would be too high |
When historical cost is used in the accounting records, the book value of the asset is __________.
A. the original cost | |
B. the market value | |
C. original cost less accumulated depreciation | |
D. closed out |
It is the year end, but not the pay period end. How will this affect the balance sheet?
A. Assets will be increased. | |
B. Liabilities will be increased. | |
C. Owner's equity will be increased. | |
D. This has no effect on the period end balance sheet. |
The cost of an asset less accumulated depreciation equals __________.
A. residual value | |
B. book value | |
C. depreciation expense | |
D. None of the above answers are correct. |
The capital balance amount shown in the balance sheet column of the worksheet represents __________.
A. the beginning capital plus net income | |
B. the beginning capital plus net income less withdrawal | |
C. the beginning capital less withdrawals | |
D. the beginning capital plus any investments to capital that occurred during the period |
The capital balance amount shown in the balance sheet column of the worksheet represents __________.
A. the beginning capital plus net income | |
B. the beginning capital plus net income less withdrawal | |
C. the beginning capital less withdrawals | |
D. the beginning capital plus any investments to capital that occurred during the period |
The depreciation of equipment will require an adjustment that results in __________.
A. total assets increasing and total expenses increasing | |
B. total assets increasing and total expenses decreasing | |
C. total assets and expenses decreasing | |
D. total assets decreasing and total expenses increasing |
Debt management ratios measure __________.
A. how effectively a company is using its cash | |
B. how well a company is using debt versus equity position | |
C. a company's ability to earn profit | |
D. a company's ability to meet payable obligations |
Profitability ratios measure __________.
A. a company's ability to earn profits | |
B. a company's ability to meet short-term obligations | |
C. how well a company is using debt versus equity | |
D. how effectively a company is using its assets |
Assets that are not expected to provide benefits for a number of accounting periods are called __________.
A. current assets | |
B. fixed assets | |
C. long-term assets | |
D. property, plant, and equipment |
How do you close the expense accounts?
A. debit Capital; credit the expense accounts | |
B. credit Capital; debit the expense accounts | |
C. credit Income Summary; debit the expense accounts | |
D. debit Income Summary; credit the expense accounts |
Closing entries __________.
A. need not be journalized since they appear on the worksheet | |
B. need not be posted if the financial statements are prepared from the worksheet | |
C. are not needed if adjusting entries are prepared | |
D. must be journalized and posted |
The correct order for closing accounts is __________.
A. revenue, expenses, income summary, withdrawals | |
B. revenue, income summary, expenses, withdrawals | |
C. revenue, expenses, capital, withdrawals | |
D. revenue, capital, expenses, withdrawals
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Which of the following assets would not be classified as property, plant, and equipment?
A. delivery truck | |
B. copyright | |
C. land | |
D. furniture |
An account in which the balance is not carried over from one accounting period to the next is called a __________.
A. permanent account | |
B. real account | |
C. temporary account | |
D. zero account |
Which of the following is a non-depreciable asset?
A. desk chairs | |
B. land | |
C. computer | |
D. building |
Income Summary __________.
A. is a temporary account | |
B. is a permanent account | |
C. summarizes revenue and expenses and transfers the balance to Capital | |
D. Both A and C are correct. |
If current assets are $60,000 and current liabilities are $50,000, the current ratio is __________.
A. 0.8:1 | |
B. 8.3:1 | |
C. 2.1:1 | |
D. 1.2:1 |
Debt management ratios measure __________.
A. how effectively a company is using its cash | |
B. how well a company is using debt versus equity position | |
C. a company's ability to earn profit | |
D. a company's ability to meet payable obligations |
For vertical analysis purposes, a base item on a balance sheet is __________.
A. total assets | |
B. total equity | |
C. total liabilities | |
D. net equity |
Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called __________.
A. comparative financial statements | |
B. common-size statements | |
C. cash flow analysis | |
D. horizontal analysis |
Which analysis deals with the percentage of changes in certain items over several years?
A. vertical analysis | |
B. ratio analysis | |
C. trend analysis | |
D. common-size statement |
The current ratio for a company with current assets of $70,000, current liabilities of $50,000, total assets of $150,000, and net sales of $80,000, would be __________.
A. 1.4 | |
B. 0.714 | |
C. 3.0 | |
D. 0.875 |
The current ratio determines the ability of a company to __________.
A. pay off all payables | |
B. pay off current payables | |
C. manage its ability to earn profit | |
D. use its equity |
To close the Withdrawals account __________.
A. debit Withdrawals; credit Capital | |
B. debit Capital; credit Withdrawals | |
C. debit Withdrawals; credit Income Summary | |
D. debit Income Summary; credit Withdrawals |
Liquidity ratios measure __________.
A. how effectively a company is using its equity | |
B. how effectively a company is using its liabilities | |
C. a company's ability to pay shareholders | |
D. a company's ability to pay off short-term debts |
The final step in the accounting cycle is __________.
A. preparing the post-closing trial balance | |
B. preparing the financial statements | |
C. journalizing the closing entries | |
D. journalizing the adjusting entries |
Determine the adjusted cash balance per bank for Santa's Packaging on November 30, from the following information.
Cash balance on the bank statement | $2,350 |
Customer's check returned—NSF | 500 |
Customer's note collected by the bank | 600 |
Deposits in transit, November 30 | 1,400 |
Outstanding checks, November 30 | 2,650 |
A. $1,250 | |
B. $1,100 | |
C. $1,550 | |
D. $1,350 |
If the written amount on the check does not match the amount expressed in figures, the bank may __________.
A. pay the amount written in words | |
B. return the check unpaid | |
C. contact the drawer to see what was meant | |
D. All of these answers are correct. |
The bank statement shows __________.
A. the beginning bank balance of the cash at the start of the month | |
B. the checks the bank has paid and any deposits received | |
C. any other charges or additions to the bank balance | |
D. All of these answers are correct. |
Internal control over a company's assets should include which of the following?
A. Responsibilities and duties of employees will be divided. | |
B. All cash receipts will be deposited into the bank the same day they arrive. | |
C. All cash payments will be made by check (except petty cash.. | |
D. All of these answers are correct. |
Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should __________.
A. increase their cash account on the company's books | |
B. decrease their cash account on the company's books | |
C. increase the ending cash balance on the bank statement | |
D. decrease the ending cash balance on the bank statement |
Endorsing a check __________.
A. guarantees payment | |
B. transfers the right to deposit or transfer cash | |
C. cancels the transaction | |
D. All of these answers are correct. |
Advantages of on-line banking include __________.
A. convenience | |
B. transaction speed | |
C. effectiveness | |
D. All of the above answers are correct. |
The check is written and signed by the __________.
A. drawer | |
B. drawee | |
C. payee | |
D. payer |
Outstanding checks __________.
A. have been subtracted on the bank records but not the checkbook records | |
B. have not been presented to the bank for payment and have not been subtracted from the checkbook | |
C. have not been presented to the bank for payment but have been subtracted in the checkbook | |
D. have been returned to the business for nonpayment |
Which of the following bank reconciliation items would be reflected in a journal entry?
A. error made by the bank | |
B. outstanding checks | |
C. bank service charges | |
D. deposit in transit |
Company policy for internal control should include all of the following EXCEPT for what?
A. Employees will be rotated. | |
B. Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks. | |
C. The owner (or responsible employee. signs all checks after receiving authorization to pay from the departments concerned. | |
D. At time of payment, all supporting invoices or documents will be stamped "paid." |
The bank charged another company's check against our account, this would be included on the bank reconciliation as a(n. __________.
A. addition to the balance per books | |
B. subtraction from the balance per books | |
C. addition to the balance per bank | |
D. subtraction from the balance per bank |
Which item(s. will require a journal entry to update the balance in the Cash account?
A. checks outstanding and deposits in transit | |
B. bank service charges, note collected by the bank, and deposits in transit | |
C. bank service charges, note collected by the bank, and error made by Accounting Services | |
D. None of these answers are correct. |
A blank endorsement on a check __________.
A. can be further endorsed by someone else | |
B. cannot be further endorsed by someone else | |
C. is the safest type of endorsement | |
D. permits only the original endorser to get the money |
The bank statement included bank charges. On the bank reconciliation, the item is __________.
A. an addition to the balance per company books | |
B. an addition to the balance per bank statement | |
C. a deduction from the balance per bank statement | |
D. a deduction from the balance per company books |
A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?
A. It is added to the bank balance. | |
B. It is shown as a debit memo. | |
C. It is shown as a credit memo. | |
D. None of these answers are correct. |
The journal entry to reverse the entry of a customer's nonsufficient funds check would include a __________.
A. debit to Cash | |
B. credit to Cash | |
C. debit to Accounts Payable | |
D. credit to Accounts Receivable |
From the bank reconciliation no entry was recorded for deposits in transit. This would cause __________.
A. assets to be overstated | |
B. assets to be understated | |
C. no impact since deposits in transit are already included in the balance per books | |
D. no impact since deposits are not recorded on the books |
The drawee is the __________.
A. person who writes the check | |
B. bank that drawer has an account with | |
C. the person to whom the check is payable | |
D. the person who reconciles the account |
Calculate, from the following information the adjusted cash balance at the end of April.
Bank statement ending cash balance | $2,000 |
General ledger cash balance ending | 3,250 |
Bank monthly service charge | 45 |
Deposits in transit | 2,500 |
Outstanding checks | 1,500 |
NSF check returned with bank statement | 205 |
A. $3,000 | |
B. $4,250 | |
C. $4,000 | |
D. $5,500 |
11 years ago
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