Review Questions from quizzes
Net Income on the Income Statement section of the worksheet will....
Be carried over to the credit column of the balance sheet on the work sheet.
The sixth step of the accounting cycle is to....
Adjusting entries are journalized and posted to the ledger.
The fourth step of the accounting cycle is to....
Adjustment data are assembled and analyzed.
The seventh step of the accounting cycle is to....
An adjusted trial balance is prepared.
The third step of the accounting cycle is to....
An adjusted trial balance is prepared.
The fifth step of the accounting cycle is to....
An optional end-of-period spreadsheet (worksheet) is prepared.
The ability to convert assets into cash is known as....
Liquidity
When a corporation adopts a fiscal year that ends when business activities have reached the lowest point in its annual operating cycle, such a fiscal year is called the....
Natural business year
Why should investors and others be careful in interpreting partial-year reports for companies that use the natural business year for their fiscal year?
The operations of the companies vary significantly throughout the fiscal year.
The first step of the accounting cycle is to....
Transactions are analyzed and recorded in the journal.
The second step of the accounting cycle is to....
Transactions are posted to the ledger.
Supplies had a beginning balance of $4,000. A physical count at the end of the accounting period revealed $2,500 supplies on hand. What adjustment amount will appear for Supplies in the Adjustments section of the work sheet?
$1500
Liabilities
- Accounts Payable - Salaries and Wages payable - Unearned Rent
Owner's Equity
- Capital - Drawing - Fees Earned - Rent Revenue - All expenses (Remember: Expenses start at the highest and work to the lowest with Miscellaneous being last).
Current Assets
- Cash - Accounts Receivable - Prepaid Insurance -Supplies
Long term assets
- Land - Building - Accumulated Depreciation: Building - Equipment - Accumulated Depreciation: Equipment
The tenth and last step of the accounting cycle is to....
A post closing trial balance is prepared.
Which account is not closed at the end of the accounting period?
Capital account
The ninth step of the accounting cycle is to....
Closing entries are journalized and posted to the ledger.
How do you figure out Current Ratio?
Current Ratio = Current Assets / Current Liabilities
What account will not appear on the post-closing trial balance?
Depreciation
The eighth step of the accounting cycle is to....
Financial statements are prepared.
A business's yearly accounting period is called the....
Fiscal Year
Revenue accounts appear on the.....
Income Statement
Why do companies base their fiscal year on a natural business cycle?
It's at the low point in the operating cycle and provides time to analyze operations and prepare financial statements.
The ability of a business to pay its debts is known as.....
Solvency
Owner withdrawals would appear on the....
Statement of owner's equity
The cash balance on the adjusted trial balance will be carried over to.....
The debit column of the balance sheet on the work sheet.
How do you figure out Working Capital?
Working Capital = Current Assets - Current Liabilities
Two financial measures for evaluating a business's liquidity and solvency are....
Working capital and current ratio
