Person Chapter 4
Which of the following would be considered the weakest current ratio?
0.35
Ellison Electronics has Cash of $200, Accounts Receivable of $800, Office Supplies of $400, Supplies Expense of $200, and Service Revenue of $900. Ellison owes $300 on Accounts Payable, $500 on Salaries Payable, and $700 on Long-term Notes Payable. What is Ellison's current ratio (rounded to two decimal places)?
1.75
Which of the following accounts may appear on a post-closing trial balance?
Cash, Accounts Receivable, and Prepaid Rent
Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the business's normal operating cycle if the cycle is longer than a year are called ________ assets.
Current
The formula for computing the current ratio is:
Current ratio = Current assets ÷ Current liabilities
Christopher's Closet sells men's clothing. At the end of the current year, Christopher's Closet has Rent Expense of $1,500, and Supplies Expense of $829. What closing entry will Christopher's Closet make for these expense accounts?
Debit Income Summary 2,329 Credit Rent Expense 1,500 Credit Supplies Expense 829
Which of the following is an appropriate closing entry?
Debit Service Revenue XXX Credit Income Summary XXX
Revenues and expenses are transferred to the ________ account before their final transfer into the Owner Capital account.
Income Summary
Which of the following accounts will be included in a post-closing trial balance?
Interest Payable
Which of the following is not a plant asset?
Office Supplies
Which of the following accounts is closed at the end of the accounting cycle?
Owner Withdrawals
Which of the following statements is true?
Prepaid Rent is a permanent account, and Income Summary is a nominal account.
What is the last step in the accounting cycle?
Prepare the post-closing trial balance.
Which of the following are NOT included in a post-closing trial balance?
Revenues and expenses
Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?
Salaries Payable
Which of the following is a permanent account?
Salary Payable
Which of the following statements is true if the income statement debit column exceeds the income statement credit column of a worksheet?
The company incurred a net loss.
Which of the following statements is true of the worksheet
The worksheet is a document used to summarize data to prepare financial statements.
Which situation indicates a net income within the Income Statement columns of the worksheet?
Total credits exceed total debits.
Which columns of the accounting worksheet show unadjusted amounts?
Trial Balance
The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?
a $2,000 credit entry to Prepaid Rent in the worksheet's adjustments column
The current ratio measures
a company's ability to pay current liabilities with current assets
The financial statements are prepared from the
adjusted trial balance
Closing journal entries are posted
after preparing the financial statements
The financial statement that reports assets, liabilities, and owners' equity as of the last day of the period is called the
balance sheet
The entries that transfer the revenue, expense, and withdrawals balances to the Owner Capital account to prepare the company's books for the next period are called
closing entries
Which of the following entries will be necessary to close the appropriate depreciation account at the end of the year?
debit Income Summary and credit Depreciation Expense
In an accounting cycle, which of the following steps takes place only at the end of the accounting period?
journalize adjusting entries
An account that is not closed at the end of the period is called a(n)
permanent account
A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries and includes only permanent accounts is called
post-closing trial balance