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.