Accounting Principles 1 Chap. 4 Review

Which of the following is a plant asset? Accounts receivable Trademark Equipment Patents

Equipment

(True/False)A balance sheet prepared in the report form lists the assets on the left and the liabilities and​ owner's equity on the right.

False

(True/False)Revenue may be called Profit and Net Income may be called Turnover in an income statement prepared under IFRS.

False

(True/False)The balance sheet is the first financial statement that is prepared at the end of the period.

False

False

(True/False) At the beginning of the​ year, the total​ owner's equity of Cutting Edge Technologies Company was $ 90000. The revenues and expenses were $ 70000 and $ 30000​, respectively. The owner did not make withdrawals or capital contributions during the year. The total​ owner's equity at the end of the year will amount to $ 120000.

True

(True/False) In the closing process, the Owner, Withdrawals account is closed to the Owner, Capital Account

False

(True/False) The Accounts payable account is a temporary account.

True

(True/False) The Service revenue account is a temporary account.

False

(True/False) The adjusting process zeroes out all revenue accounts and all expense accounts:

False

(True/False) The Martinez, Withdrawals account is a permanent account.

False

(true/false) The Cash account is a temporary account.

Salaries​ Payable, Accounts​ Payable, and Unearned Revenue are examples of​ ________. -current liabilities -long - term liabilities -short term investments -fixed assets

Current Liabilities

Which of the following statements regarding intangible assets is incorrect? -Intangible assets include the exclusive right to produce or sell an invention. -Intangible assets are valuable because of the special rights they carry. -Intangible assets are not reported on the balance sheet. -Intangible assets have no physical form.

Intangible Assets are not reported on the balance sheet.

Under which of the following categories would bonds held as an investment for more than a year​ appear? Current Liabilities Long-term liabilities Current Assets Long-term assets

Long-term assets

-​Olsteen, Capital will be debited for $ 14000 and Income Summary will be credited for $ 14000.

Olsteen Company earned revenues of $ 62000 and incurred expenses of $ 76000. No withdrawals were taken. The owner did not make any new capital contributions during the year. The company is a sole proprietorship. Which of the following statements is​ correct? -The entries to close revenues and expenses will differ if there is a net loss. -​Olsteen, Capital will be debited for $ 14000 and Income Summary will be credited for $ 14000. -The entry to close Income Summary requires a debit to the Income Summary account. -The entry to close Income Summary is the same regardless of a net income or a net loss.

Income Statement

Revenues and expenses may be transferred to the​ ________ account before their final transfer into the​ Owner, Capital account. -Net Income -Assets -Owner, Withdrawals -Income Summary

Owner, Capital

To which of the following accounts should the balance in the Income Summary account be​ closed? -Net Income -​Owner, Capital -Owner, Withdrawals -Service Revenue

(True/False) In a classified balance sheet, assets are reported i order of liquidity and liabilities are listed in order in which they must be paid.

True

Depreciation Expense

Which of the following accounts will be closed by debiting the Income Summary​ account? -Depreciation Expense -Accumulated Depreciation -Service Revenue -Accounts Payable

Balance of $0

Woods Company earned revenues of $ 16000 and incurred expenses of $ 7000. The​ owner, Woods, withdrew $ 1000. What is the balance in the Income Summary account after closing net income or loss to the​ Woods, Capital​ account? -credit balance of $ 7000 -balance of​ $0 -debit balance of $ 16000 -credit balance of $ 9000

Liquidity is the measure of how _____ -Easily an asset can be exchanged for another asset -Long an asset can be used. -Quickly an asset may be converted into cash. - quickly an asset appreciates in value.

quickly an asset may be converted into cash.

(True/False) In a balance sheet, assets are classified as either current or long term, depending on their liquidity

true