Accounting Chapter 4

Current assets $ 5,000 Property, plant, and equipment 10,000 Current liabilities 3,500 Long-term liabilities 5,000 Stockholders' equity 6,500 What is Menendez Company's current ratio?

1.43 Current Ratio = Current Assets/Current Liabilities ($5,000/$3,500) = 1.43

On the end-of-period spreadsheet, Accumulated Depreciation has a balance of $600 in the Unadjusted Trial Balance column and an adjustment of $200 in the Adjustments Credit column. What amount should appear for Accumulated Depreciation in the Adjusted Trial Balance column?

A credit of $800

Which of the following is true regarding the end-of-period spreadsheet?

Amounts are read across a row and added or subtracted to determine the amounts to insert in the Adjusted Trial Balance columns.

Which of the following will be reported in the subsection of the balance sheet called current assets?

Cash, accounts receivable, supplies

The following items appear on the adjusted trial balance of Barker Company: Which of the following will be included in the second closing entry?

Credit to Dividends for $440.

Which of the following is not correct about cross-referencing adjustments in the spreadsheet?

Cross-referencing adjustments uses account numbers for each debit and credit.

The numerator in the current ratio calculation is

Current Assets.

The following are some of the steps in the accounting cycle. Which of the following reflects the steps in the correct order? A) Financial statements are prepared. B) An unadjusted trial balance is prepared. C) Closing entries are journalized and posted to the ledger. D) Journalized business transactions are posted to the ledger E) A post-closing trial balance is prepared

D, B, A, C, E

Which of the following is not an actual step in the accounting cycle?

Decisions of managers are made after reviewing the financial statements

Which of the following is the last step of the posting process?

Enter the ledger account number in the Post. Ref. column of the journal.

Total revenues equal $25,700, and total expenses equal $17,500. What is the amount of net income or net loss?

Net income of $8,200

Which of the following will increase retained earnings on the statement of stockholders' equity?

Net income only

Which of the following accounts will be closed with a debit?

Rent Revenue

In the closing process which account balances will be transferred to retained earnings?

Revenues, expenses, dividends

Which statement is false about reversing entries?

Reversing entries are required as part of the closing process.

The posting of depreciation expense will be done during which step of the accounting cycle

Step 6: Journalizing and posting adjusting entries

Which of the following is true regarding the flow of information from the adjusted trial balance on the end-of-period spreadsheet?

The revenue and expense account balances flow into the income statement.

The journal entry to record a payment of dividends includes a

debit to Dividends.

The spreadsheet is

used to determine amounts recorded in the unadjusted trial balance.