Chapter 4

Which of the following statements correctly describes what a work sheet is?

1. A worksheet is an aid used by accounts 2. A work sheet helps to organize financial date 3. A work sheet doesn't substitute for financial statements 4. A work sheet is prepared at the end of an accounting period

A classified balance sheet has several categories of assets and liabilities including:

1. Current assets 2. No current (long-term) liabilities 3. Long-term investments 4. Plant assets

Explain the required steps to complete a work sheet by placing the following steps in the correct order

1. Enter unadjusted trial balance 2. Enter adjustments 3. Prepare adjustment trial balance 4. Sort adjusted trial balance amounts to financial statements 5. Total financial statement columns, compute income or loss and balance columns

A classified balance sheet can be described as a balance sheet that:

1. Organizes assets and liabilities into important subgroups 2. Lists current assets in the order of how quickly they can be converted to cash

Which statement below are true regarding permanent and temporary accounts?

1. Permanent accounts will appear on the post-closing trial balance

Closing means to transfer account balances from (asset/liability/permanent/temporary) accounts so that they will start with a (contra/larger/zero) balance at the beginning of the next period.

1. temporary 2. zero

Define "current" as it applies to assets and liabilities on a classified balance sheet

Current items are those expected to come due within one year or the company's operate cycle, whichever is longer

Select the statement below that describes a post- closing trial balance

It's a listing of all permanent accounts and their balances after closing

Identify which of the following steps in the accounting cycle is optional

Reversing journal entries

Which of the following lists steps of the accounting cycle in the correct order?

Trial balance, adjusting journal entries, post-closing trial balance