Question 1

Income statement accounts are closed at what stage of the accounting process?

Accepted Answer

A)  At the time that adjustments are made.
B)  After adjustments are made and before the income statement is prepared.
C)  After the income statement and the statement of retained earnings are prepared,but before the balance sheet is prepared.
D)  As the last journal entries at the end of each accounting year.E) A) and B)
F) B) and D)

Question 2

On the statement of retained earnings:

Accepted Answer

A)  dividends declared increase net income and are added to calculate the end-of-year balance of retained earnings.
B)  dividends declared are subtracted to calculate the end-of-year balance of retained earnings.
C)  dividends declared are not used to calculate the end-of-year balance of retained earnings.
D)  dividends declared are not reported on the retained earnings statement.E) B) and D)
F) A) and D)

Question 3

The amount charged for a good or service provided to a customer on account is recorded only after the payment is received.

Accepted Answer

A) True 
 B)False

Question 4

Prepaid expense accounts are reported as assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

Insert the appropriate letter A,D,or C into the correct blank to describe the type of adjustment required at the end of April.
Entry Type
A Accrual adjusting entry
D Deferral adjusting entry
C Closing entry

Accepted Answer

The answer of Insert the appropriate letter A,D,or C into...

Question 6

Which of the following statements is true?

Accepted Answer

A)  If revenues are less than expenses,the company has a net loss and retained earnings decreases.
B)  If revenues are greater than expenses,the company has net income and contributed capital increases.
C)  If revenues are less than expenses,the company has a net loss and contributed capital increases to balance off the loss.
D)  If revenues are greater than expenses,the company has net income and retained earnings decreases.E) B) and C)
F) A) and D)

Question 7

After net income has been determined,it is then transferred to:

Accepted Answer

A)  the balance sheet.
B)  the income statement.
C)  the statement of cash flows.
D)  the statement of retained earnings.E) B) and C)
F) All of the above

Question 8

Total Liabilities on the Balance Sheet at December 31,2013 are:

Accepted Answer

A)  $19,550.
B)  $14,950.
C)  $15,350.
D)  $19,850.E) All of the above
F) A) and D)

Question 9

Before the closing entries are prepared,the retained earnings balance in the adjusted trial balance is equal to:

Accepted Answer

A)  the balance of retained earnings at the beginning of the year.
B)  the balance of retained earnings after adding revenues and subtracting expenses but before subtracting dividends.
C)  the balance of retained earnings at the end of the year.
D)  the balance of retained earnings at the beginning of the next year.E) A) and B)
F) All of the above

Question 10

A deferral adjustment may involve one asset and one expense account.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a true statement?

Accepted Answer

A)  Expenses are closed with a credit.
B)  Revenues are closed with a debit.
C)  Dividends are closed with a credit.
D)  Retained earnings are closed with a debit.E) A) and B)
F) A) and C)

Question 12

The carrying value of an asset is an approximation of the asset's market value.

Accepted Answer

A) True 
 B)False

Question 13

If a company failed to record depreciation expense on equipment for a period,the financial statements would show total assets overstated and total stockholders' equity understated on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

What is the amount of Retained Earnings on the Balance Sheet at December 31,2013?

Accepted Answer

A)  $100
B)  $2,300
C)  $3,900
D)  $1,700E) All of the above
F) A) and D)

Question 15

An adjusting journal entry that includes an increase to an asset contra-account would include an increase in a(n) :

Accepted Answer

A)  related asset account.
B)  liability account.
C)  revenue account.
D)  expense account.E) All of the above
F) C) and D)

Question 16

What is the amount to be reported on the balance sheet as Prepaid Insurance at December 31,2014?

Accepted Answer

A)  $0
B)  $14,000
C)  $12,000
D)  $16,000E) B) and C)
F) B) and D)

Question 17

Which of the following is performed last at the end of the year?

Accepted Answer

A)  Prepare adjusting entries.
B)  Prepare an adjusted trial balance.
C)  Prepare closing journal entries.
D)  Prepare a post-closing trial balance.E) C) and D)
F) B) and D)

Question 18

To calculate the company's income tax expense for the current period,it is necessary to know:

Accepted Answer

A)  the company's operating revenue and tax bill from prior periods.
B)  the company's income before income taxes and the company's tax rate.
C)  the company's operating expenses and revenue.
D)  the company's revenues,expenses,and dividends.E) A) and B)
F) A) and C)

Question 19

Which of the following would appear in the credit column of an adjusted trial balance?

Accepted Answer

A)  Income tax payable.
B)  Depreciation expense.
C)  Prepaid insurance.
D)  Interest receivable.E) B) and C)
F) A) and D)

Question 20

Which of the following accounts would be classified as a current liability?

Accepted Answer

A)  Service revenue.
B)  Wages expense.
C)  Accumulated depreciation.
D)  Dividends payable.E) A) and B)
F) A) and C)

Exam 4: Adjustments, Financial Statements, and Financial Results

A deferral adjustment may involve one asset and one expense account.

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An adjusting journal entry that includes an increase to an asset contra-account would include an increase in a(n) :

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The amount charged for a good or service provided to a customer on account is recorded only after the payment is received.

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Which of the following is performed last at the end of the year?

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Which of the following statements is true?

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The carrying value of an asset is an approximation of the asset's market value.

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After net income has been determined,it is then transferred to:

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Which of the following accounts would be classified as a current liability?

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Total Liabilities on the Balance Sheet at December 31,2013 are:

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Income statement accounts are closed at what stage of the accounting process?

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What is the amount of Retained Earnings on the Balance Sheet at December 31,2013?

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Prepaid expense accounts are reported as assets on the balance sheet.

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On the statement of retained earnings:

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Which of the following would appear in the credit column of an adjusted trial balance?

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Insert the appropriate letter A,D,or C into the correct blank to describe the type of adjustment required at the end of April. Entry Type A Accrual adjusting entry D Deferral adjusting entry C Closing entry

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Before the closing entries are prepared,the retained earnings balance in the adjusted trial balance is equal to:

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If a company failed to record depreciation expense on equipment for a period,the financial statements would show total assets overstated and total stockholders' equity understated on the balance sheet.

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Which of the following is not a true statement?

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What is the amount to be reported on the balance sheet as Prepaid Insurance at December 31,2014?

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To calculate the company's income tax expense for the current period,it is necessary to know:

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