Person Chapter 4

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Which of the following would be considered the weakest current ratio?

0.35

Ellison Electronics has Cash of $200, Accounts Receivable of $800, Office Supplies of $400, Supplies Expense of $200, and Service Revenue of $900. Ellison owes $300 on Accounts Payable, $500 on Salaries Payable, and $700 on Long-term Notes Payable. What is Ellison's current ratio (rounded to two decimal places)?

1.75

Which of the following accounts may appear on a post-closing trial balance?

Cash, Accounts Receivable, and Prepaid Rent

Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the business's normal operating cycle if the cycle is longer than a year are called ________ assets.

Current

The formula for computing the current ratio is:

Current ratio = Current assets ÷ Current liabilities

Christopher's Closet sells men's clothing. At the end of the current year, Christopher's Closet has Rent Expense of $1,500, and Supplies Expense of $829. What closing entry will Christopher's Closet make for these expense accounts?

Debit Income Summary 2,329 Credit Rent Expense 1,500 Credit Supplies Expense 829

Which of the following is an appropriate closing entry?

Debit Service Revenue XXX Credit Income Summary XXX

Revenues and expenses are transferred to the ________ account before their final transfer into the Owner Capital account.

Income Summary

Which of the following accounts will be included in a post-closing trial balance?

Interest Payable

Which of the following is not a plant asset?

Office Supplies

Which of the following accounts is closed at the end of the accounting cycle?

Owner Withdrawals

Which of the following statements is true?

Prepaid Rent is a permanent account, and Income Summary is a nominal account.

What is the last step in the accounting cycle?

Prepare the post-closing trial balance.

Which of the following are NOT included in a post-closing trial balance?

Revenues and expenses

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

Salaries Payable

Which of the following is a permanent account?

Salary Payable

Which of the following statements is true if the income statement debit column exceeds the income statement credit column of a worksheet?

The company incurred a net loss.

Which of the following statements is true of the worksheet

The worksheet is a document used to summarize data to prepare financial statements.

Which situation indicates a net income within the Income Statement columns of the worksheet?

Total credits exceed total debits.

Which columns of the accounting worksheet show unadjusted amounts?

Trial Balance

The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?

a $2,000 credit entry to Prepaid Rent in the worksheet's adjustments column

The current ratio measures

a company's ability to pay current liabilities with current assets

The financial statements are prepared from the

adjusted trial balance

Closing journal entries are posted

after preparing the financial statements

The financial statement that reports assets, liabilities, and owners' equity as of the last day of the period is called the

balance sheet

The entries that transfer the revenue, expense, and withdrawals balances to the Owner Capital account to prepare the company's books for the next period are called

closing entries

Which of the following entries will be necessary to close the appropriate depreciation account at the end of the year?

debit Income Summary and credit Depreciation Expense

In an accounting cycle, which of the following steps takes place only at the end of the accounting period?

journalize adjusting entries

An account that is not closed at the end of the period is called a(n)

permanent account

A list of the accounts and their balances at the end of the period after journalizing and posting the closing entries and includes only permanent accounts is called

post-closing trial balance


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