Deck 4: Completing the Accounting Cycle

Question 1

A classified balance sheet differs from an unclassified balance sheet in that

A)An unclassified balance sheet is never used by large companies.
B)A classified balance sheet groups items into the broad categories of asset,liability,and equity.
C)A classified balance sheet presents information in a manner that makes it easier to calculate a company's current ratio.
D)A classified balance sheet will include more accounts than an unclassified balance sheet for the same company on the same date.
E)A classified balance sheet is not usually provided to outside parties.

Answer 1

C

Question 2

The current ratio:

A)Is used to measure a company's profitability.
B)Is used to measure the relation between assets and long-term debt.
C)Measures the effect of operating income on profit.
D)Is used to help assess a company's ability to pay its debts in the near future.
E)Is calculated by dividing current assets by equity.

Answer 2

D

Question 3

The usual order for the asset subgroups of a classified balance sheet is:

A)Current assets,prepaid expenses,long-term investments,intangible assets.
B)Long-term investments,current assets,plant assets,intangible assets.
C)Current assets,long-term investments,plant assets,intangible assets.
D)Intangible assets,current assets,long-term investments,plant assets.
E)Plant assets,intangible assets,long-term investments,current assets.

Answer 3

C

Question 4

Closing the temporary accounts at the end of each accounting period does all of the following except:

A)Serves to transfer the effects of these accounts to the owner's capital account on the balance sheet.
B)Prepares the withdrawals account for use in the next period.
C)Brings the revenue and expense accounts to zero balances.
D)Has no effect on the owner's capital account.
E)Causes owner's capital to reflect increases from revenues and decreases from expenses and withdrawals.

Question 5

Closing entries are required:

A)If management has decided to cease operating the business.
B)Only if the company adheres to the accrual method of accounting.
C)If a company's bookkeeper does not choose to prepare reversing entries.
D)If the temporary accounts are to reflect correct amounts for each accounting period.
E)In order to satisfy the Internal Revenue Service guidelines.

Question 6

Which of the following accounts are permanent (real)accounts?

A)Fees earned.
B)Office supplies expense.
C)Interest revenue.
D)Accounts payable.
E)Salaries expense.

Question 7

Which of the following are classified as current assets?

A)Office equipment.
B)Patent.
C)Unearned revenue.
D)Office supplies.
E)Land.

Question 8

Journal entries recorded at the end of each accounting period to prepare the revenue,expense,and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

A)Adjusting entries.
B)Closing entries.
C)Final entries.
D)Work sheet entries.
E)Updating entries.

Question 9

The recurring steps performed each reporting period in preparing financial statements,starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance,is referred to as the:

A)Accounting period.
B)Operating cycle.
C)Accounting cycle.
D)Closing cycle.
E)Natural business year.

Question 10

When closing entries are made:

A)All ledger accounts are closed to start the new accounting period.
B)All temporary accounts are closed but permanent accounts are not closed.
C)All real accounts are closed but nominal accounts are not closed.
D)All permanent accounts are closed but nominal accounts are not closed.
E)All balance sheet accounts are closed.

Question 11

Revenues,expenses,and withdrawals accounts,which are closed at the end of each accounting period are:

A)Real accounts.
B)Temporary accounts.
C)Closing accounts.
D)Permanent accounts.
E)Balance sheet accounts.

Question 12

Assets,liabilities,and equity accounts are not closed;these accounts are called:

A)Nominal accounts.
B)Temporary accounts.
C)Permanent accounts.
D)Contra accounts.
E)Accrued accounts.

Question 13

Which of the following is the usual final step in the accounting cycle?

A)Journalizing transactions.
B)Preparing an adjusted trial balance.
C)Preparing a post-closing trial balance.
D)Preparing the financial statements.
E)Preparing a work sheet.

Question 14

The assets section of a classified balance sheet usually includes the subgroups:

A)Current assets,long-term investments,plant assets,and intangible assets.
B)Current assets,long-term assets,revenues,and intangible assets.
C)Current assets,long-term investments,plant assets,and equity.
D)Current liabilities,long-term investments,plant assets,and intangible assets.
E)Current assets,liabilities,plant assets,and intangible assets.

Question 15

Which of the following are classified as plant assets?

A)Office equipment.
B)Patent.
C)Cash.
D)Office supplies.
E)Merchandise inventory.

Question 16

Another name for a temporary account is a(n):

A)Real account.
B)Contra account.
C)Accrued account.
D)Balance column account.
E)Nominal account.

Question 17

Which of the following statements is incorrect?

A)Permanent account is another name for nominal account.
B)Temporary accounts carry a zero balance at the beginning of each accounting period.
C)The Income Summary account is a temporary account.
D)Real accounts remain open as long as the asset,liability,or equity items recorded in the accounts continue in existence.
E)The closing process applies only to temporary accounts.

Question 18

Two common subgroups for liabilities on a classified balance sheet are:

A)Current liabilities and intangible liabilities.
B)Present liabilities and operating liabilities.
C)General liabilities and specific liabilities.
D)Intangible liabilities and long-term liabilities.
E)Current liabilities and long-term liabilities.

Question 19

The closing process is necessary in order to:

A)Calculate net income or net loss for an accounting period.
B)Ensure that all permanent accounts are closed to zero at the end of each accounting period.
C)Ensure that the company complies with state laws.
D)Ensure that net income or net loss and owner withdrawals for the period are closed into the owner's capital account.
E)Ensure that management is aware of how well the company is operating.

Question 20

A classified balance sheet:

A)Measures a company's ability to pay its bills on time.
B)Organizes assets and liabilities into important subgroups that provide more information.
C)Broadly groups items into assets,liabilities and equity.
D)Reports operating,investing,and financing activities.
E)Reports the effect of profit and withdrawals on owner's capital.

Question 21

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from)the owner's capital account is the:

A)Income Summary account.
B)Closing account.
C)Balance column account.
D)Contra account.
E)Nominal account.

Question 22

Tara Westmont,the proprietor of Tiptoe Shoes,had annual revenues of $185,000,expenses of $103,700,and withdrew $18,000 from the business during the current year.The owner's capital account before closing had a balance of $297,000.The entry to close the Income Summary account at the end of the year,after revenue and expense accounts have been closed,is:

A)Debit T.Westmont,Capital $297,000;credit Income Summary $297,000
B)Debit T.Westmont,Capital $63,300;credit Income Summary $63,300
C)Debit Income Summary $63,300;credit T.Westmont,Capital $63,300
D)Debit Income Summary $81,300,credit T.Westmont,Capital $81,300
E)Debit T.Westmont,Capital $81,300;credit Income Summary $81,300

Question 23

A company's December 31 work sheet for the current period appears below.Based on the information provided,what is net income for the current period?

A)$3,305.
B)$4,180.
C)$2,350.
D)$2,540.
E)$3,225.

Question 24

All of the following regarding the current ratio are true except:

A)Current ratio is calculated by dividing current assets by current liabilities.
B)Current ratio helps to assess a company's ability to pay its debts in the near future.
C)Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit.
D)Current ratio can affect a creditor's decision about whether to lend money to a company.
E)Current ratio can reveal challenges in covering short-term obligations if it is less than 1.

Question 25

Tara Westmont,the proprietor of Tiptoe Shoes,had annual revenues of $185,000,expenses of $103,700,and withdrew $18,000 from the business during the current year.The owner's capital account before closing had a balance of $297,000.The ending owner's capital balance after closing is:

A)$185,000
B)$63,300
C)$81,300
D)$360,300
E)$378,300

Question 26

If the Balance Sheet and Statement of Owner's Equity columns of a work sheet fail to balance when the net income is added to the Balance Sheet and Statement of Owner's Equity Credit column,the cause could be:

A)An expense entered in the Balance Sheet and Statement of Owner's Equity Debit column.
B)A revenue entered in the Balance Sheet and Statement of Owner's Equity Credit column.
C)An asset amount entered in the Income Statement and Statement of Owner's Equity Debit column.
D)A liability amount entered in the Income Statement and Statement of Owner's Equity Credit column.
E)An expense entered in the Balance Sheet and Statement of Owner's Equity Credit column.

Question 27

Accumulated Depreciation and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

A)Balance Sheet and Statement of Owner's Equity-Credit and Income Statement-Credit.
B)Balance Sheet and Statement of Owner's Equity-Debit and Income Statement-Debit.
C)Income Statement-Debit and Income Statement-Credit.
D)Balance Sheet and Statement of Owner's Equity-Debit and Balance Sheet and Statement of Owner's Equity-Credit.
E)Balance Sheet and Statement of Owner's Equity-Debit;and Income Statement-Credit.

Question 28

The balances in the unadjusted columns of a work sheet will agree with:

A)the balances reflected in the company's financial statements.
B)the balances reflected in the company's unadjusted trial balance.
C)whatever balances management has decided to report.
D)the balances in the company's post-closing trial balance.
E)the balances management budgeted for the accounting period.

Question 29

Which of the following errors would cause the Balance Sheet and Statement of Owner's Equity columns of a work sheet to be out of balance?

A)Entering an asset amount in the Income Statement Debit column.
B)Entering a liability amount in the Income Statement Credit column.
C)Entering an expense amount in the Balance Sheet and Statement of Owner's Equity Debit column.
D)Entering a revenue amount in the Balance Sheet and Statement of Owner's Equity Debit column.
E)Entering a liability amount in the Balance Sheet and Statement of Owner's Equity Credit column.

Question 30

A company's December 31 work sheet for the current period appears below.Based on the information provided,what is net income for the current period?

A)$1,400.
B)$1,855.
C)$1,905.
D)$2,060.
E)$4,670.

Question 31

The Unadjusted Trial Balance columns of a company's work sheet shows the Store Supplies account with a balance of $750.The Adjustments columns shows a credit of $425 for supplies used during the period.The amount shown as Store Supplies in the Balance Sheet columns of the work sheet is:

A)$325 debit.
B)$325 credit.
C)$425 debit.
D)$750 debit.
E)$425 credit.

Question 32

An optional columnar working paper used to prepare a company's unadjusted trial balance,adjusting entries,adjusted trial balance,and financial statements is a(n):

A)Adjusted trial balance.
B)Work sheet.
C)Post-closing trial balance.
D)Unadjusted trial balance.
E)General ledger.

Question 33

Tara Westmont,the proprietor of Tiptoe Shoes,had annual revenues of $185,000,expenses of $103,700,and withdrew $18,000 from the business during the current year.The owner's capital account before closing had a balance of $297,000.The Net Income for the year is:

A)$185,000
B)$63,300
C)$81,300
D)$360,300
E)$378,300

Question 34

In the process of completing a work sheet,the accountant determines that the Income Statement debit column totals $83,000,while the Income Statement credit column totals $65,000.To enter net income (or net loss)for the period into the work sheet would require an entry to

A)the Adjustments debit column and the Adjustments credit column.
B)the Unadjusted Trial Balance debit column and the Adjustments credit column.
C)it is not practical to enter Net Income (or Net Loss)on the work sheet.
D)the Balance Sheet & Statement of Owner's Equity debit column and the Income Statement credit column.
E)the Income Statement debit column and the Balance Sheet & Statement of Owner's Equity credit column.

Question 35

In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column.The Balance Sheet columns will balance on completing the work sheet but with the wrong net income,if the amount sorted in error is:

A)An expense amount placed in the Balance Sheet Credit column.
B)A revenue amount placed in the Balance Sheet Debit column.
C)A liability amount placed in the Income Statement Credit column.
D)An asset amount placed in the Balance Sheet Credit column.
E)A liability amount placed in the Balance Sheet Debit column.

Question 36

Statements that show the financial statements as if proposed transactions had already occurred are called:

A)Pro forma statements.
B)Professional statements.
C)Simplified statements.
D)Temporary statements.
E)Interim statements.

Question 37

The Unadjusted Trial Balance columns of a work sheet total $84,000.The Adjustments columns contain entries for the following: 1.Office supplies used during the period,$1,200.
2)Expiration of prepaid rent,$700.
3)Accrued salaries expense,$500.
4)Depreciation expense,$800.
5)Accrued service fees receivable,$400.
The Adjusted Trial Balance columns total is:

A)$80,400.
B)$84,000.
C)$85,700.
D)$85,900.
E)$87,600.

Question 38

K.Canopy,the proprietor of Canopy Services,withdrew $5,700 from the business during the current year.The entry to close the withdrawals account at the end of the year is:

A)Debit K Canopy,Withdrawals $5,700;credit Cash,$5,700
B)Debit K.Canopy,Capital $5,700;credit K.Canopy,Withdrawals $5,700
C)Debit K.Canopy,Withdrawals $5,700;credit K.Canopy,Capital $5,700
D)Debit K.Canopy,Capital $5,700,credit Salary Expense $5,700
E)Debit Income Summary $5,700;credit K Canopy,Capital $5,700

Question 39

Which of the following statements is incorrect?

A)Working papers are useful aids in the accounting process.
B)On the work sheet,the effects of the accounting adjustments are shown on the account balances.
C)After the work sheet is completed,it can be used to help prepare the financial statements.
D)On the work sheet,the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance.
E)A worksheet is not a substitute for financial statements.

Question 40

A company shows a $600 balance in Prepaid Rent in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired rent of $200.This adjusting entry results in:

A)$200 decrease in net income.
B)$200 increase in net income.
C)$200 difference between the debit and credit columns of the Unadjusted Trial Balance.
D)$200 of prepaid insurance.
E)An error in the financial statements.

Question 41

At the beginning of the year,Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000.During the year,the company reported total revenues of $226,000 and expenses of $175,000.Also,owner withdrawals during the year totaled $48,000.Assuming no other changes to owner's capital,the balance in the owner's capital account at the end of the year would be:

A)$174,000.
B)$78,000.
C)$171,000.
D)$120,000.
E)$123,000.

Question 42

The Income Summary account is used to:

A)Adjust and update asset and liability accounts.
B)Close the revenue and expense accounts.
C)Determine the appropriate withdrawal amount.
D)Replace the income statement under certain circumstances.
E)Replace the capital account in some businesses.

Question 43

Reversing entries:

A)Are necessary when journal entries have been incorrectly recorded.
B)Are a required step in the accounting cycle.
C)Will often result temporarily in abnormal account balances in some accounts.
D)Are required only if the company uses accounting software to record journal entries.
E)Must be made before preparing the post-closing trial balance.

Question 44

The following information is available for the Harris Vacation Rental Agency.After these closing entries what will be the balance in the Sue Harris,Capital account?

A)$65,000.
B)$80,000.
C)$130,000.
D)$145,000.
E)$280,000.

Question 45

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

A)Office Equipment.
B)Accumulated Depreciation-Office Equipment.
C)Depreciation Expense-Office Equipment.
D)N.Young,Capital.
E)Salaries Payable.

Question 46

All of the following regarding reversing entries are true except:

A)Reversing entries are optional.
B)Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the previous accounting period.
C)Reversing entries are used to simplify a company's recordkeeping.
D)Reversing entries are dated the first day of the new accounting period.
E)Reversing entries should not be the exact opposite of previous period adjusting entries.

Question 47

The trial balance prepared after all closing entries have been journalized and posted is called the:

A)Unadjusted trial balance.
B)Post-closing trial balance.
C)General ledger.
D)Adjusted trial balance.
E)Work sheet.

Question 48

Jen Rogers withdrew a total of $35,000 from her business during the current year.The entry needed to close the withdrawals account is:

A)Debit Income Summary and credit Cash for $35,000.
B)Debit Jen Rogers,Withdrawals and credit Cash for $35,000.
C)Debit Income Summary and credit Jen Rogers,Withdrawals for $35,000.
D)Debit Jen Rogers,Capital and credit Jen Rogers,Withdrawals for $35,000.
E)Debit Jen Rogers,Withdrawals and credit Jen Rogers,Capital for $35,000.

Question 49

A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below.What amount will be posted to Wilson Peters,Capital in the process of closing the Income Summary account? (Assume all accounts have normal balances. )

A)$16,780 debit.
B)$7,180 credit.
C)$16,780 credit.
D)$18,280 credit.
E)$23,780 credit.

Question 50

Reversing entries:

A)Are optional.
B)Are mandatory.
C)Correct errors in journal entries.
D)Are required by GAAP.
E)Are prepared on the worksheet.

Question 51

Which of the following statements is true?

A)Owner's capital must be closed each accounting period.
B)A post-closing trial balance should include only permanent accounts.
C)The work sheet can be substituted for preparing financial statements.
D)By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts.
E)Closing entries are only necessary if errors have been made.

Question 52

It is obvious that an error occurred in the preparation and/or posting of closing entries if:

A)all revenue and expense accounts have zero balances.
B)the owner's capital account is debited for the amount of the net loss for the period.
C)the income summary account is debited for the amount of net income for the period.
D)all balance sheet accounts have zero balances.
E)only permanent accounts appear on the post-closing trial balance.

Question 53

The purpose of reversing entries is to:

A)Simplify a company's recording of certain journal entries in the future.
B)Correct errors made in previous journal entries.
C)Ensure that closing entries have been properly posted to the ledger accounts.
D)Make certain that only permanent accounts are carried forward into the next accounting period.
E)Complete a required step in the accounting cycle.

Question 54

Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

A)Land.
B)S.Stills,Withdrawal.
C)Accounts Payable.
D)Unearned Revenue.
E)Prepaid Insurance.

Question 55

All of the following statements regarding a work sheet are true except:

A)A worksheet aids in the preparation of financial statements.
B)A worksheet reduces possible errors when working with many accounts and adjustments.
C)A worksheet is not useful in planning and organizing an audit of financial statements.
D)A worksheet helps in preparing interim financial statements.
E)A worksheet shows the effects of proposed or "what-if" transactions.

Question 56

Kline Company accrued wages of $7,350 that were earned by employees unpaid at the end of 2014.Assuming Kline uses reversing entries,which of the following entries is appropriate for reversing the accrued wages at the beginning of 2015?

A)Debit Wages Expense $7,350;credit Cash $7,350.
B)Debit Wages Expense $7,350;credit Wages Payable $7,350.
C)Debit Wages Payable $7,350;credit Cash $7,350.
D)Debit Cash $7,350;credit Wages Expense $7,350.
E)Debit Wages Payable $7,350;credit Wages Expense $7,350.

Question 57

A company had revenues of $75,000 and expenses of $62,000 for the accounting period.The owner withdrew $8,000 in cash during the same period.Which of the following entries could not be a closing entry?

A)Debit Income Summary $13,000;credit Owner's,Capital $13,000.
B)Debit Income Summary $75,000;credit Revenues $75,000.
C)Debit Revenues $75,000;credit Income Summary $75,000.
D)Debit Income Summary $62,000,credit Expenses $62,000.
E)Debit Owner's,Capital $8,000,credit Owner's,Withdrawals $8,000.

Question 58

A post-closing trial balance reports:

A)All permanent ledger accounts with balances.
B)All nominal ledger accounts with balances.
C)All temporary and permanent ledger accounts with balances.
D)Only revenue and expense accounts.
E)Only asset accounts.

Question 59

After preparing and posting the closing entries for revenues and expenses,the income summary account has a debit balance of $33,000.The entry to close the income summary account will be:

A)Debit Owner Withdrawals $33,000;credit Income Summary$33,000.
B)Debit Income Summary $33,000;credit Owner Withdrawals $33,000.
C)Debit Income Summary$33,000;credit Owner Capital $33,000.
D)Debit Owner Capital $33,000;credit Income Summary $33,000.
E)Credit Owner Capital $33,000;debit Owner Withdrawals $33,000.

Question 60

At the beginning of the year,a company's balance sheet reported the following balances: Total Assets = $225,000;Total Liabilities = $125,000;and Owner's Capital = $100,000.During the year,the company reported revenues of $46,000 and expenses of $30,000.In addition,owner's withdrawals for the year totaled $20,000.Assuming no other changes to owner's capital,the balance in the owner's capital account at the end of the year would be:

A)$116,000.
B)$136,000.
C)$24,000.
D)$96,000.
E)$104,000.

Question 61

The following information is available for Brendon Company before closing the accounts.What will be the amount in the Income Summary account that should be closed to Brendon,Capital?

A)$80,000.
B)$64,400.
C)$43,000.
D)$32,400.
E)$42,400.

Question 62

Use the information in the adjusted trial balance presented below to calculate current assets for Taron Company:

A)$21,200.
B)$45,600.
C)$24,400.
D)$95,600.
E)$41,200.

Question 63

Flagg records adjusting entries at its December 31 year end.At December 31,employees had earned $12,000 of unpaid and unrecorded salaries.The next payday is January 3,at which time $30,000 will be paid.Prepare the journal on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1.

A)Debit Salaries expense $12,000;debit Salaries payable $18,000;credit Cash $30,000.
B)Debit Salaries expense $30,000;credit Cash $30,000.
C)Debit Salaries payable $30,000;credit Cash $30,000.
D)Debit Salaries expense $18,000,debit Salaries payable $12,000;credit Cash $30,000.
E)Debit Salaries expense $18,000;credit Cash $18,000.

Question 64

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

A)Accounts Receivable.
B)S.Stills,Withdrawal.
C)Consulting Fees Earned.
D)Depreciation Expense-Equipment.
E)Salaries Expense.

Question 65

A number of accounts are listed below.Use the table to classify each account by indicating whether it is a temporary or permanent account,whether it is included in the Income Statement or Balance sheet,and if it is closed at the end of the accounting period,and,if so,whether it is closed with a debit or credit.The first one is done as an example.

Question 66

Which of the following statements about a company's operating cycle is not true:

A)Non-current items are those expected to come due within one year or the company's operating cycle.
B)The operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services.
C)The length of a company's operating cycle depends on its activities.
D)For a merchandiser selling products,the operating cycle is the time span between paying suppliers for merchandise and receiving cash from customers.
E)Most operating cycles are less than one year.

Question 67

Which of the following statements regarding reporting under GAAP and IFRS is not true:

A)Both GAAP and IFRS define the initial asset value as historical cost for nearly all assets.
B)The definition of an asset under GAAP and IFRS involves three basic criteria.
C)Both GAAP and IFRS define the initial asset value as replacement value.
D)The definition of a liability under GAAP and IFRS involves three basic criteria.
E)After acquisition,one of two asset measurement systems is applied.

Question 68

Flagg records adjusting entries at its December 31 year end.At December 31,employees had earned $12,000 of unpaid and unrecorded salaries.The next payday is January 3,at which time $30,000 will be paid.Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.

A)Debit Salaries expense $12,000;credit Salaries payable $12,000.
B)Debit Salaries expense $18,000;debit Salaries payable $12,000;credit Cash $30,000.
C)Debit Salaries payable $18,000;credit Cash $18,000.
D)Debit Salaries payable $12,000,credit Salaries expense $12,000.
E)Debit Salaries expense $18,000;credit Salaries payable $18,000.

Question 69

In the table below,indicate with an "X" in the proper column whether the account is a temporary (nominal)account or a permanent (real)account.

Question 70

For the year ended December 31,a company had revenues of $187,000 and expenses of $109,000.The owner withdrew $37,000 during the year.Which of the following entries could not be a closing entry?

A)Debit Income Summary $78,000;credit Owner's,Capital $78,000.
B)Debit Owner's Capital $37,000;credit Owner Withdrawals $37,000.
C)Debit revenues $187,000;credit Income Summary $187,000.
D)Debit Income Summary $109,000,credit expenses $109,000.
E)Debit Income Summary $187,000;credit revenues $187,000.

Question 71

Palmer Company is at the end of its annual accounting period.The accountant has journalized and posted all external transactions and all adjusting entries,had prepared an adjusted trial balance,and completed the financial statements.The next step in the accounting cycle is:

A)Prepare a work sheet.
B)Prepare reversing entries.
C)Close temporary accounts.
D)Prepare a post-closing trial balance.
E)Prepare an unadjusted trial balance.

Question 72

Permanent accounts include all of the following except:

A)Accumulated Depreciation-Equipment.
B)Prepaid Insurance.
C)Unearned Revenue.
D)Accounts Receivable.
E)Depreciation Expense-Equipment.

Question 73

Temporary accounts include all of the following except:

A)Consulting revenue.
B)Withdrawals.
C)Rent expense.
D)Prepaid rent.
E)Income Summary.

Question 74

For the year ended December 31,a company has revenues of $317,000 and expenses of $196,000.The owner withdrew $50,000 during the year.The balance in the owner's capital account before closing is $81,000.Which of the following entries would be used to close the withdrawal account?

A)Debit Income Summary $50,000;credit Owner's,Capital $50,000.
B)Debit Owner's Capital $50,000;credit Owner Withdrawals $50,000.
C)Debit Owner's Capital $81,000;credit Income Summary $81,000.
D)Debit Income Summary $81,000,credit Owner's Withdrawals $81,000.
E)Debit Owner's Withdrawals $50,000;credit Owner's Capital $50,000.

Question 75

Use the information in the adjusted trial balance presented below to calculate the current ratio for Taron Company:

A)1.87.
B).54.
C)3.92.
D)1.77.
E)1.60.

Question 76

Based on the following information from Schrute Company's balance sheet,calculate the current ratio.

A).44.
B)3.51.
C)3.33.
D)1.06.
E)2.23.

Question 77

The following information is available for Zephyr Company before closing the accounts.After all of the closing entries are made,what will be the balance in the Zephyr,Capital account?

A)$115,000.
B)$225,000.
C)$264,000.
D)$186,000.
E)$956,000.

Question 78

Which of the following types of businesses might have an operating cycle longer than one year?

A)Ski resort.
B)Clothing retailer.
C)Florist.
D)Wheat farmer.
E)Commercial airplane manufacturer.

Question 79

All of the following statements regarding the Income Statement columns on the worksheet are true except:

A)The balances in the Income Statement credit column are revenues.
B)The balances in the Income Statement credit column are unearned revenues.
C)The balances in the Income Statement debit column are expenses.
D)The difference between the totals of the Income Statement columns is net income or net loss.
E)The net income or net loss from the Income Statement columns is entered in the Balance Sheet & Statement of Owner's Equity columns.

Question 80

Which of the following accounts could not be classified as a current liability?

A)Unearned revenues.
B)Accounts payable.
C)Notes payable (due in 11 months).
D)Current portion of long-term note payable.
E)Notes payable (due in 5 years).