Question 1

A balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet.
A) report form
B) unclassified form
C) account form
D) audited form

Accepted Answer

A report form balance sheet lists the assets above the liabilities and stockholders' equity sections, allowing for a clearer presentation of the financial information. An unclassified form balance sheet does not separate assets and liabilities into current and non-current categories, while an account form balance sheet lists the assets and liabilities side by side in a T-shaped format. The term "audited form" does not refer to a type of balance sheet format.

Question 2

Salaries Payable, Accounts Payable, and Unearned Revenue are examples of ________.
A) short-term investments
B) fixed assets
C) current liabilities
D) long-term liabilities

Accepted Answer

Salaries Payable, Accounts Payable, and Unearned Revenue are all current liabilities, meaning they are debts or obligations that must be paid within one year or less.

Question 3

Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the business's normal operating cycle if the cycle is longer than a year, are called ________ assets.
A) intangible
B) plant
C) long-term
D) current

Accepted Answer

Assets that are expected to be converted to cash, sold, or used up within the next 12 months or operating cycle (whichever is longer) are referred to as current assets. A is incorrect because intangible assets refer to non-physical assets like patents, trademarks, and copyrights. B is incorrect because plant assets, also referred to as property, plant, and equipment, include items such as buildings, machinery, and vehicles that are expected to last longer than a year. C is incorrect because long-term assets are expected to last longer than a year and include items such as investments, real estate, and long-term investments.

Question 4

Patents, copyrights, and trademarks are examples of ________.
A) short-term investments
B) fixed assets
C) long-term investments
D) intangible assets

Accepted Answer

Patents, copyrights, and trademarks are intangible assets as they do not have any physical existence but have legal value and protection.

Question 5

Which of the following is a measure of how quickly an item can be converted to cash?
A) Debt ratio
B) Return on assets ratio
C) Liquidity
D) Accounting cycle

Accepted Answer

Liquidity is a measure of how quickly an item can be converted to cash. Debt ratio is a measure of a company's leverage, return on assets ratio measures how effective a company is at using its assets to generate profit, and accounting cycle refers to the process of recording and reporting financial transactions.

Question 6

All assets that will not be converted to cash or used up within the business's operating cycle or one year, whichever is greater, are called ________.
A) long-term assets
B) fully depreciated assets
C) current assets
D) current liabilities

Accepted Answer

Long-term assets are those that are not expected to be converted to cash or used up within the business's operating cycle or one year. These assets are expected to provide benefits to the business for more than one year. Examples of long-term assets include property, plant, and equipment, and long-term investments. Current assets, on the other hand, are assets that are expected to be converted to cash or used up within the business's operating cycle or one year. These assets include cash, accounts receivable, inventory, and prepaid expenses. Fully depreciated assets means that the value of the asset has been fully reduced to zero, so it is not a correct answer. Current liabilities are short-term debts that are expected to be paid within the business's operating cycle or one year.

Question 7

Under which of the following categories would Accounts Receivable appear?
A) current assets
B) current liabilities
C) long-term assets
D) long-term liabilities

Accepted Answer

Accounts Receivable represents money that is owed to a company by its customers and is considered a current asset because it is expected to be collected within one year.

Question 8

Which of the following is a plant asset?
A) Equipment
B) Patents
C) Trademark
D) Accounts Receivable

Accepted Answer

Plant assets are long-term tangible assets used in the operations of a business. Equipment, such as machinery and vehicles, is a common example of a plant asset. Patents and trademarks are intangible assets, while accounts receivable is a current asset.

Question 9

Which of the following is an example of an intangible asset?
A) Equipment
B) Plant
C) Property
D) Copyright

Accepted Answer

Copyright is an intangible asset as it has value but cannot be physically touched or seen. Equipment, plant, and property are all tangible assets as they can be physically touched and seen.

Question 10

Under which of the following categories would bonds held as an investment for more than a year appear?
A) current assets
B) long-term liabilities
C) long-term assets
D) current liabilities

Accepted Answer

Bonds held as an investment for more than a year would appear under long-term assets on the balance sheet. Long-term assets are assets that are expected to help generate revenues over a long period of time, typically more than one year.

Question 11

Notes Payable due within two years are classified as ________.
A) current liabilities
B) current assets
C) long-term liabilities
D) long-term assets

Accepted Answer

The answer of Notes Payable due within two years are...

Question 12

The time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash, is called the ________.
A) production time
B) operating cycle
C) accounting cycle
D) sales time

Accepted Answer

The operating cycle is the time it takes for a business to purchase inventory, sell the inventory to customers, and collect cash from those customers. It takes into account both the production time and the sales time, as well as the time it takes for the business to receive payment from customers. Therefore, option B is the correct answer. Option A (production time) and option D (sales time) do not encompass the entire cycle, and option C (accounting cycle) refers to the process of recording and reporting financial transactions, rather than the cash flow cycle.

Question 13

Under which of the following categories would Accounts Payable appear?
A) long-term assets
B) current assets
C) long-term liabilities
D) current liabilities

Accepted Answer

Accounts Payable is a liability that represents the amount that a company owes to its suppliers or vendors for goods or services received but not yet paid for. As it is a debt that must be paid within a year, it falls under the category of current liabilities.

Question 14

Assets with no physical form are ________.
A) current assets
B) intangible assets
C) not listed on the balance sheet because they have no value
D) included in stockholders' equity

Accepted Answer

Assets with no physical form are typically referred to as intangible assets. Examples include patents, trademarks, copyrights, and goodwill. They are shown on the balance sheet and are considered long-term assets.

Question 15

Buildings, land, and equipment are classified as ________.
A) current assets
B) long-term assets
C) current liabilities
D) long-term liabilities

Accepted Answer

Buildings, land, and equipment are typically long-term assets since they are expected to have a useful life of more than one year. Current assets are assets that can be easily converted into cash within one year, such as cash, accounts receivable, and inventory. Current liabilities are debts that are due within one year, such as accounts payable and short-term loans. Long-term liabilities are debts that are due in more than one year, such as mortgages and long-term loans.

Question 16

Which of the following is a current asset that is expected to be converted to cash, sold, or consumed during the next year (or the normal operating cycle, if longer)?
A) Land
B) Equipment
C) Building
D) Accounts Receivable

Accepted Answer

Accounts Receivable is a current asset that is expected to be converted to cash within the next year or operating cycle as it represents the amount owed to the company by its customers for goods or services that have been sold but not yet paid for. Land, equipment, and buildings are all long-term assets and are not expected to be converted to cash within the next year.

Question 17

Under which of the following categories would bonds held as an investment for less than a year appear?
A) long-term assets
B) current assets
C) long-term liabilities
D) current liabilities

Accepted Answer

Bonds held as an investment for less than a year would appear under current assets on the balance sheet because they are expected to be converted into cash within a short period of time.

Question 18

Property, plant, and equipment are ________.
A) presented in order of the category name, with Land being presented last
B) also called fixed or plant assets
C) either tangible or intangible assets
D) easily converted to cash

Accepted Answer

Property, plant, and equipment are also known as fixed or plant assets.

Question 19

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

Accepted Answer

Intangible assets are reported on the balance sheet as long-term assets, along with a description of the item and its estimated useful life.

Question 20

Which of the following is the most liquid asset?
A) Building
B) Prepaid Expenses
C) Accounts Receivable
D) Cash

Accepted Answer

Cash is the most liquid asset as it can be easily and quickly converted into any other form of asset or used for transactions. Building, prepaid expenses, and accounts receivable are not as easily converted into cash or used for transactions.

Quiz 4: Completing the Accounting Cycle

A balance sheet that lists the assets above the liabilities and stockholders' equity sections is a(n) ________ balance sheet.

Salaries Payable, Accounts Payable, and Unearned Revenue are examples of ________.

Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the business's normal operating cycle if the cycle is longer than a year, are called ________ assets.

Patents, copyrights, and trademarks are examples of ________.

Which of the following is a measure of how quickly an item can be converted to cash?

All assets that will not be converted to cash or used up within the business's operating cycle or one year, whichever is greater, are called ________.

Under which of the following categories would Accounts Receivable appear?

Which of the following is a plant asset?

Which of the following is an example of an intangible asset?

Under which of the following categories would bonds held as an investment for more than a year appear?

Notes Payable due within two years are classified as ________.

The time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash, is called the ________.

Under which of the following categories would Accounts Payable appear?

Assets with no physical form are ________.

Buildings, land, and equipment are classified as ________.

Which of the following is a current asset that is expected to be converted to cash, sold, or consumed during the next year (or the normal operating cycle, if longer) ?

Under which of the following categories would bonds held as an investment for less than a year appear?

Property, plant, and equipment are ________.

Which of the following statements regarding intangible assets is incorrect?

Which of the following is the most liquid asset?