Module 1/Chapter 3

Which of the following are characteristics of all balance sheet accounts? (Select all that apply) - Balances are closed to retained earnings - Balances are carried forward from period to period - Accounts are referred to as permanent - Balances can never be equal to zero - Accounts are referred to as temporary

Balances are carried forward from period to period Accounts are referred to as permanent

Which of the following expressions correctly calculates "total assets?"

Current assets plus long-term assets

Which of the following statements regarding the statement of cash flows are correct?

Reports cash disbursements Reports cash receipts The final financial statement that is typically prepared

A classified balance sheet shows subtotals for current ____ and current ____. (Enter one word per blank)

asset liability

Which of the following relationships is correct?

assets = liabilities + stockholder's equity

Reporting revenues only when cash is received and expenses only when cash is paid is called the ___ basis of accounting

cash

The entries that transfer the balances of all temporary accounts to retained earnings are referred to as

closing entries

Which of the following accounts should be classified as stockholders' equity?

common stock and retained earnings

On a classified balance sheet, total liabilities represent the sum of ___ and long-term liabilities. (Enter only one word.)

current

The statement of stockholders' equity includes these amounts: (Select all that apply.)

dividends for the period ending balance retained earnings net income

Revenues and expenses are reported in the:

income statement

A long-term liability:

is NOT due within the next year

Adam Corporation uses the cash-basis of accounting. Adam Corporation should record expenses when:

paid we record revenues at the time we RECIEVE cash we record expense at the time we PAY cash

All balance sheet accounts are ___ accounts, meaning the balances are carried forward from one period to the next.

permanent

On a classified balance sheet, the sum of current and long-term liabilities refers to __ liabilities

total

The sum of current and long-term assets reported on the balance sheet is referred to as ___ ___.

total assets

The information reported in the statement of cash flows is organized by these activities: (Select all that apply) - operating - business - accounting - financing - investing

operating, investing, financing

Which financial statement would report all of the following information: beginning balances for common stock and retained earnings; current period net income or loss; current period dividends; common stock issued during the year; ending balances of common stock and retained earnings?

statement of stockholders equity

A classified balance sheet ______.

groups asset and liabilities into current and long-term categories

An asset that can quickly be turned into cash has the characteristic of

liquidity

Which of these is a long-term liability?

mortgage payable due in 20 years

Permanent accounts are found in:

only the balance sheet

Stockholders' equity consists of two main components, common stock and ______.

retained earnings

The two major categories reported in the income statement are:

revenue; expense

Which of the following financial statements typically is prepared last?

statement of cash flows

Closing entries move the balances from the ______ accounts into the Retained Earnings account.

temporary