Question 1

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

Accepted Answer

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.F) A) and E)
G) A) and D)

Question 2

Which of the following statements is incorrect?

Accepted Answer

A)  An income statement reports revenues earned less expenses incurred.
B)  An unadjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments.
C)  Interim financial reports can be based on one-month or three-month accounting periods.
D)  The fiscal year is any 12 consecutive months (or 52 weeks) used by a business as its annual accounting period.
E)  Property,plant,and equipment are referred to as plant assets.F) All of the above
G) C) and D)

Question 3

Which of the following statements is incorrect?

Accepted Answer

A)  An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.
B)  An adjusted trial balance is a list of accounts and balances prepared after adjusting entries have been recorded and posted to the ledger.
C)  Each trial balance amount is used in preparing the financial statements.
D)  Financial statements should be prepared directly from information in the unadjusted trial balance.
E)  Financial statements can be prepared directly from information in the adjusted trial balance.F) D) and E)
G) C) and D)

Question 4

A balance sheet that places the liabilities and equity to the right of the assets is a(n) :

Accepted Answer

A)  Account form balance sheet.
B)  Report form balance sheet.
C)  Interim balance sheet.
D)  Classified balance sheet.
E)  Unclassified balance sheet.F) None of the above
G) A) and C)

Question 5

During the closing process,Retained Earnings is closed to the Dividends account.

Accepted Answer

A) True 
 B)False  False

Question 6

Complete the following by filling in the blanks:
(1)The Prepaid Insurance account had a $545 debit balance at the beginning of the current year; $650 of insurance premiums were paid during the year; and the year-end balance sheet showed $420 of prepaid insurance; consequently,the income statement for the year must have shown $________ of insurance expense.
(2)The Office Supplies account began the current year with a $235 debit balance; the income statement for the year showed $475 of office supplies expense; and the year-end balance sheet showed the current asset,office supplies,at $275; consequently,if all supplies were accounted for,$________ of office supplies must have been purchased during the year.

Accepted Answer

(1)$775 = $545 + $65...

Question 7

A classified balance sheet:

Accepted Answer

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 dividends on retained earnings.F) A) and B)
G) C) and D)

Question 8

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Accepted Answer

A)  Accumulated depreciation.
B)  A contra account.
C)  The expense recognition (matching) principle.
D)  Depreciation expense.
E)  An accrued account.F) A) and C)
G) C) and D) D

Question 9

Using the information given below,prepare a balance sheet for Rapid Car Services from the adjusted trial balance.

Accepted Answer

The answer of Using the information given below,prepare a balance...

Question 10

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

Accepted Answer

A)   
B)   
C)   
D)   
E)   F) B) and C)
G) A) and E)

Question 11

What is an adjusted trial balance? Why is it prepared?

Accepted Answer

An adjusted trial balance is a list of a...

Question 12

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

Accepted Answer

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.F) B) and D)
G) B) and C)

Question 13

Long-term investments can include land held for future expansion.

Accepted Answer

A) True 
 B)False

Question 14

An ________ is a listing of all of the accounts in the ledger with their account balances after adjustments are made.

Accepted Answer

adjusted t...

Question 15

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Accepted Answer

A)  Debit Unpaid Salaries and credit Salaries Payable.
B)  Debit Salaries Payable and credit Salaries Expense.
C)  Debit Salaries Expense and credit Cash.
D)  Debit Salaries Expense and credit Salaries Payable.
E)  Debit Cash and credit Salaries Expense.F) B) and C)
G) D) and E)

Question 16

Prior to recording adjusting entries,the Office Supplies account had a $359 debit balance.A physical count of the supplies showed $105 of unused supplies available.The required adjusting entry is:

Accepted Answer

A)  Debit Office Supplies $105 and credit Office Supplies Expense $105.
B)  Debit Office Supplies Expense $105 and credit Office Supplies $105.
C)  Debit Office Supplies Expense $254 and credit Office Supplies $254.
D)  Debit Office Supplies $254 and credit Office Supplies Expense $254.
E)  Debit Office Supplies $105 and credit Supplies Expense $254.F) B) and D)
G) B) and C)

Question 17

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

Accepted Answer

A) True 
 B)False  True

Question 18

A company had $6,992,000 in net income for the year.Its net sales were $15,200,000 for the same period.Calculate its profit margin.

Accepted Answer

A)  85.4%.
B)  117.1%.
C)  53.9%.
D)  217.1%.
E)  46.0%.F) A) and D)
G) All of the above

Question 19

Match between columns
                        Premises: A balance sheet that broadly groups items into assets,liabilities and equity.
A ratio that is used to help evaluate a company's ability to pay its short-term obligations,calculated by dividing current assets by current liabilities.
Long-term resources that benefit business operations,usually lack physical form,and have uncertain benefits.
Assets that are held for more than the longer of one year or the operating cycle of the company and are not used in operations.
A balance sheet that organizes the assets and liabilities into important subgroups that provide more information to decision makers.
Cash and other resources that are expected to be sold,collected,or used within one year or the company's operating cycle,whichever is longer.
Tangible assets that are long-lived and used to produce or sell products or services.
Obligations due to be paid or settled within one year or the operating cycle of a business,whichever is longer.
Entries recorded at the end of each accounting period to transfer end-of-period balances in revenue,expense,and dividends accounts to the permanent retained earnings account.
The owners' claims on the assets of a company.

Accepted Answer

The Answer of Stockholders' equity and Intangible assets and Current is...

Question 20

Which of the following is classified as a plant asset?

Accepted Answer

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

Exam 3: Adjusting Accounts for Financial Statements

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

Correct Answer
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Which of the following statements is incorrect?

Correct Answer
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Which of the following statements is incorrect?

Correct Answer
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A balance sheet that places the liabilities and equity to the right of the assets is a(n) :

Correct Answer
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During the closing process,Retained Earnings is closed to the Dividends account.

Correct Answer
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False

Correct Answer
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(1)$775 = $545 + $65...
View Answer

A classified balance sheet:

Correct Answer
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The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Correct Answer
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D

Using the information given below,prepare a balance sheet for Rapid Car Services from the adjusted trial balance.

Correct Answer
verified

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

Correct Answer
verified

What is an adjusted trial balance? Why is it prepared?

Correct Answer
verified
An adjusted trial balance is a list of a...
View Answer

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

Correct Answer
verified

Long-term investments can include land held for future expansion.

Correct Answer
verified

An ________ is a listing of all of the accounts in the ledger with their account balances after adjustments are made.

Correct Answer
verified
adjusted t...
View Answer

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Correct Answer
verified

Prior to recording adjusting entries,the Office Supplies account had a $359 debit balance.A physical count of the supplies showed $105 of unused supplies available.The required adjusting entry is:

Correct Answer
verified

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

Correct Answer
verified
True

A company had $6,992,000 in net income for the year.Its net sales were $15,200,000 for the same period.Calculate its profit margin.

Correct Answer
verified

Match the following terms with the appropriate definition.

Which of the following is classified as a plant asset?

Correct Answer
verified

Exam 3: Adjusting Accounts for Financial Statements

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

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

A balance sheet that places the liabilities and equity to the right of the assets is a(n) :

Correct AnswerverifiedShow Answer

During the closing process,Retained Earnings is closed to the Dividends account.

Correct AnswerverifiedFalse

Correct Answerverified(1)$775 = $545 + $65...View AnswerShow Answer

A classified balance sheet:

Correct AnswerverifiedShow Answer

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:

Correct AnswerverifiedD

Using the information given below,prepare a balance sheet for Rapid Car Services from the adjusted trial balance.

Correct AnswerverifiedShow Answer

Under the alternative method for accounting for unearned revenue,which of the following pairs of journal entry formats is correct?

Correct AnswerverifiedShow Answer

What is an adjusted trial balance? Why is it prepared?

Correct AnswerverifiedAn adjusted trial balance is a list of a...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Long-term investments can include land held for future expansion.

Correct AnswerverifiedShow Answer

An ________ is a listing of all of the accounts in the ledger with their account balances after adjustments are made.

Correct Answerverifiedadjusted t...View AnswerShow Answer

The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is:

Correct AnswerverifiedShow Answer

Prior to recording adjusting entries,the Office Supplies account had a $359 debit balance.A physical count of the supplies showed $105 of unused supplies available.The required adjusting entry is:

Correct AnswerverifiedShow Answer

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.

Correct AnswerverifiedTrue

A company had $6,992,000 in net income for the year.Its net sales were $15,200,000 for the same period.Calculate its profit margin.

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition.

Which of the following is classified as a plant asset?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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(1)$775 = $545 + $65...
View Answer

Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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An adjusted trial balance is a list of a...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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adjusted t...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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