ACC 121
The accountant of Residential Architectural Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following statements is true
. The total assets will be overstated.
A list of the accounts and their balances at the end of the period, after journalizing and posting the closing entries, is called ________. . A. post−closing trial balance B.chart of accounts C.adjusted trial balance D. pre−closing balance sheet
A
The accountant of Peyton Financial Services failed to make an adjusting entry to record $7,000 of depreciation expense. Which of the following statements is true? A.The total expenses will be understated. B.The total revenue will be overstated. C.The total revenue will be understated. D.The total expenses will be overstated.
A
The formula for computing the current ratio is ________. A.Current ratio = Total Current assets / Total Current liabilities B.Current ratio = Total Current assets / Total assets C.Current ratio = Total Current assets / Total Stockholders' Equity D.Current ratio = Total Current assets / Total liabilities
A
Which financial statement is prepared last? A. balance sheet B.income statement C.statement of retained earnings D.The financial statements can be prepared in any order.
A
Which of the following would be considered the weakest current ratio? A.0.65 B.0.9 C.1.75 D.2.2
A
Adjusting entries are needed to correctly measure the ________. A. net income (loss) on the balance sheet B.net income (loss) on the income statement C.beginning balance in the Cash account D.ending balance in the Cash account
B
Financial statements are prepared from the balances in a(n) ________. A.general journal B.unadjusted trial balance C.adjusted trial balance D. Chart of account chart of accounts
C
Metro Event Planning Services collects fees from its customers in advance. On January 1, 2019, the balance of its Unearned Revenue account was $4,000 (CR). During January and February, the company collected $2,000 and $600 as advance fees. During the two- month period, it performed services of $5,500 related to the deferred revenue. What is the balance in Unearned Revenue at the end of February? A.debit balance of $4,000 B.credit balance of $4,000 C.credit balance of $1,100 D.debit balance of $1,100
C
The accountant of Reliable Consulting, Inc. failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true? A.The total assets will be overstated. B.The total liabilities will be understated. C.The total assets will be understated. D.The total liabilities will be overstated.
D
An adjusting entry is completed ________.
D. at the end of the accounting period
A balance sheet prepared in the report form lists the assets on the left and the liabilities and stockholders' equity on the right.
F
A business starts each new time period with a zero beginning balance in permanent accounts.
F
A net loss from the Balance Sheet decreases Retained Earnings.
F
Adjusting entries record revenues in the period in which cash is received and expenses in the period when cash is paid.
F
An adjusted trial balance does not list the revenues and expenses of a business.
F
An increase in the current ratio implies that the profitability of the company has increased from the previous period.
F
GAAP requires publicly traded companies to prepare a post minus −closing trial balance and publish it in their annual report.
F
If a company fails to make an adjusting entry for accrued revenues, the net income will be overstated
F
If a company fails to make an adjusting entry to record accrued expenses, the liabilities and net income will be overstated.
F
If net income is overstated, equity will be understated.
F
In an accounting cycle, an analysis of transactions is performed at the end of each accounting period.
F
Only temporary accounts appear on the post minus −closing trial balance
F
Revenue may be called Profit and Net Income may be called Turnover in an income statement prepared under IFRS.
F
The Cash account is a temporary account.
F
The Office Supplies account is a temporary account.
F
The adjusting process zeroes out all revenue accounts and all expense accounts.
F
The balance sheet is the first financial statement that is prepared at the end of the period.
F
The current ratio is calculated using the values from the income statement.
F
The key differences between the cash basis and accrual basis of accounting are the timing and recognition of assets and liabilities.
F
The key differences between the cash basis and accrual basis of accounting can be explained by understanding the rules of debits and credits.
F
The major difference between a cash basis accounting system and an accrual basis accounting system is the timing of recording revenues and assets.
F
The operating cycle is the time span required for a business to repay its long minus −term liabilities.
F
The post−closing trial balance shows the net income for the period just ended.
F
The purpose of the adjusted trial balance is to ensure that no errors were made during the adjusting process.
F
The smaller the current ratio, the higher the firm's ability to repay its current debts.
F
Under cash basis accounting, revenue is recorded when it is earned, regardless of when cash is received.
F
Accrual basis accounting requires the business to review the unadjusted trial balance and determine whether any additional revenues and expenses need to be recorded.
T
Adjusting entries are completed to ensure that all income statement accounts for the accounting period examined have been recorded and to update the balance sheet accounts.
T
In a balance sheet, assets are classified as either current or long term, depending on their liquidity
T
In a balance sheet, prepared under IFRS guidelines, cash is often shown as one of the last assets listed.
T
In cash basis accounting, revenue is recorded when cash is received, and expenses are recorded when they are paid.
T
In the closing process, the Dividends account is closed to the Retained Earnings account.
T
Permanent accounts are not closed at the end of the accounting period.
T
The accounting period used for the annual financial statements is called the fiscal year.
T
The steps of the accounting cycle are followed throughout the accounting period.
T
The time period concept assumes that the activities of a business can be sliced into small time segments.
T
Under cash basis accounting, an expense is recorded only when cash is paid.
T
The accountant of Omega, Inc. failed to make an adjusting entry to record $6,000 of unearned service revenue that has now been earned. Assume the deferred revenue was initially recorded as a liability. Which of the following statements is true?
The total revenue will be understated.