ACC Ch 4

When a corporation adopts a fiscal year that ends when business activities have reached the lowest point in its annual operating cycle, such a fiscal year is called the a) natural business year. b) calendar year. c) accounting year. d) None of these choices

a) natural business year.

The last step of the accounting cycle is to _____. a) prepare a post-closing trial balance b) prepare an adjusted trial balance c) prepare financial statements d) journalize and post the closing entries to the ledger

a) prepare a post-closing trial balance

The Cash balance on the adjusted trial balance will be carried over to a) the Debit column of the balance sheet on the work sheet. b) the Credit column of the balance sheet on the work sheet. c) the Debit column of the income statement on the work sheet. d) None of these choices

a) the Debit column of the balance sheet on the work sheet.

The journal entry required to close the Drawing account is _____. a) a debit to Income Summary account and a credit to Drawing account b) a debit to Capital account and a credit to Drawing account c) a debit to Capital account and a credit to Cash account d) None of these choices are correct.

b) a debit to Capital account and a credit to Drawing account

Net income on the Income Statement section of the work sheet will a) be carried over to the Debit column of the balance sheet on the work sheet. b) be carried over to the Credit column of the balance sheet on the work sheet. c) remain on the Income Statement section of the work sheet. d) None of these choices

b) be carried over to the Credit column of the balance sheet on the work sheet.

The Microsoft product most commonly used to create a spreadsheet is a) Word. b) Outlook. c) Excel. d) PowerPoint.

c) Excel.

The ability to convert assets into cash is known as a) solvency b) financial convertibility. c) liquidity. d) None of these choices

c) liquidity.

Owner withdrawals would appear on the _____. a) income statement b) balance sheet c) statement of owner's equity d) None of these choices are correct.

c) statement of owner's equity

Companies use reverse entries to avoid error of omission. T of F?

True

During the accounting period, cash was debited for $4,000, $3,000, and $1,000. Cash was also credited for $3,000, $500, and $100. The beginning balance of Cash was a $10,000 debit. What would be the ending balance for Cash in the general ledger? a) $21,600, debit b) $14,400, debit c) $21,600, credit d) $14,400, credit

b) $14,400, debit

The following amounts were taken from a company's balance sheet: Total assets, $100,000 Total liabilities, $20,000 Total owner's equity, $80,000 Current assets, $10,000 Current liabilities, $5,000 The company's net working capital would be _____. a) $80,000 b) $5,000 c) $10,000 d) $20,000

b) $5,000

The following amounts were taken from a company's balance sheet: Total assets, $100,000 Total liabilities, $20,000 Total owner's equity, $80,000 Current assets, $10,000 Current liabilities, $5,000 The company's current ratio would be _____. a) 0.50 b) 5.00 c) 2.00 d) None of these choices are correct.

c) 2.00

The spreadsheet can be used to prepare a) the income statement. b) the balance sheet. c) the statement of owner's equity. d) All of these choices are correct.

d) All of these choices are correct.

_____ are the exact opposite of the related _____. a) Adjusting entry; reverse entries b) Normal entries; adjusting entry c) Reverse entries; adjusting entry d) None of these choices are correct.

d) None of these choices are correct.

The first step of the accounting cycle is to _____. a) post journal entries to the ledger b) prepare an unadjusted trial balance c) analyze the adjustment entries d) analyze and record the transactions in the journal

d) analyze and record the transactions in the journal

The following accounts are closed at the end of the accounting period except _____. a) revenue b) expenses c) withdrawals d) capital

d) capital

Supplies had a beginning balance of $4,000. A physical count at the end of the accounting period revealed $2,500 supplies on hand. What adjustment amount will appear for Supplies in the Adjustments section of the work sheet? a) $1,500 b) $6,500 c) $2,500 d) None of these choices are correct.

a) $1,500

Which account will not appear on the post-closing trial balance? a) Revenue b) Cash c) Accounts Receivable d) Accounts Payable

a) Revenue

Revenue accounts appear on the _____. a) income statement b) balance sheet c) statement of owner's equity d) None of these choices are correct.

a) income statement