Accounting Chapter 4 True or False
Accrued expenses are ordinarily listed on the balance sheet as current assets
False
Balance sheet accounts are not considered real accounts
False
Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets
False
Financial statements should be prepared im mediately after closing entries are journalized and posted.
False
For most businesses, the cash basis of accounting will provide adequate financial statements for user needs
False
Joumalizing and posting closing entries must be completed before financial statements can be prepared
False
Journalizing and posting closing entries must be completed before financial statements can be prepared
False
Office Equipment is an example of a current asset account
False
The current ratio is computed by dividing current liabilities by current assets
False
The post-closing trial balance will generally have fewer accounts than the adjusted trial balance
False
There is really no benefit in preparing financial statements in any particular order
False
The drawing account is a temporary account
True
The last step of the accounting cycle is to prepare a post-closing trial balance
True
The work sheet is not considered a part of the formal accounting records
True
Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts
True
Accumulated Depreciation is a permanent account
True
After analyzing and recording transactions in the joural, the nest step would be to post the transactions to the ledger
True
After net income or loss is entered on the work sheet, the Debit column total must equal the Credit column total for the Balance Sheet pair of columns
True
All income statement accounts will be closed at the end of the period
True
Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities
True
Net income is closed to the owner's capital account
True
Prepaid Insurance is an example of a current asset
True
Prepaid expenses that benefit a relatively short period of time are listed on the balance sheet as current assets
True
The ability to convert assets into cash is called liquidity
True
The balance sheet accounts are referred to as real or permanent accounts
True