Strayer ACC557 (Strayer) Week 4 Chapter 4 Quiz

ACC 557 (Strayer) WK 4 Chapter 4 QuizTRUE-FALSE STATEMENTS 1. A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet. 2. If a worksheet is used, financial statements can be prepared before adjusting entries are journalized. 3. If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income. 4. It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet. 5. The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet. 6. The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns. 7. The balance of the depreciation expense account will appear in the income statement debit column of a worksheet. 8. Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year. 9. The Dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period. 10. After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances. 11. Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure. 12. Closing the Dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period. 13. The Dividends account is a permanent account whose balance is carried forward to the next accounting period. 14. Closing entries are journalized after adjusting entries have been journalized. 15. The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance. 16. The post-closing trial balance is entered in the first two columns of a worksheet. 17. A business entity has only one accounting cycle over its economic existence. 18. The accounting cycle begins at the start of a new accounting period. 19. Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account. 20. Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period. 21. An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated. 22. In a corporation, Retained Earnings is a part of owners’ equity. 23. A company’s operating cycle and fiscal year are usually the same length of time. 24. Cash and supplies are both classified as current assets. 25. Long-term investments would appear in the property, plant, and equipment section of the balance sheet. 26. A liability is classified as a current liability if the company is to pay it within the forthcoming year. 27. A company’s liquidity is concerned with the relationship between long-term investments and long-term debt. 28. Current assets are customarily the first items listed on a classified balance sheet. 29. The operating cycle of a company is determined by the number of years the company has been operating. 30. The accumulated depreciation account shows the total amount of depreciation that the company has expensed thus far in the asset’s life.31. The use of reversing entries changes the amount reported in the financial statements.32. Each reversing entry is the exact opposite of the adjusting entry made in the previous period.33. Reversing entries are an optional bookkeeping procedure. 34. After a worksheet has been completed, the statement columns contain all data that are required for the preparation of financial statements. 35. To close net income to retained earnings, Income Summary is debited and Retained Earnings is credited. 36. In one closing entry, Dividends is credited and Income Summary is debited. 37. The post-closing trial balance will contain only retained earnings statement accounts and balance sheet accounts. 38. The operating cycle of a company is the average time required to collect the receivables resulting from producing revenues. 39. Current assets are listed in the order of liquidity. 40. Current liabilities are obligations that the company is to pay within the coming year.MULTIPLE CHOICE QUESTIONS 41. Preparing a worksheet involvesa. two steps.b. three steps.c. four steps.d. five steps. 42. The adjustments entered in the adjustments columns of a worksheet area. not journalized.b. posted to the ledger but not journalized.c. not journalized until after the financial statements are prepared.d. journalized before the worksheet is completed. 43. The information for preparing a trial balance on a worksheet is obtained froma. financial statements.b. general ledger accounts.c. general journal entries.d. business documents. 44. After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on thea. adjusted trial balance.b. post-closing trial balance.c. the general journal.d. adjustments columns of the worksheet. 45. If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company hasa. earned net income for the period.b. an error because debits do not equal credits.c. suffered a net loss for the period.d. to make an adjusting entry. 46. A worksheet is a multiple column form that facilitates thea. identification of events.b. measurement process.c. preparation of financial statements.d. analysis process. 47. Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?a. Large company with numerous accountsb. Small company with numerous accountsc. All companies, since worksheets are required under generally accepted accounting principlesd. Small company with few accounts 48. A worksheet can be thought of as a(n)a. permanent accounting record.b. optional device used by accountants.c. part of the general ledger.d. part of the journal. 49. The account, Supplies, will appear in the following debit columns of the worksheet.a. Trial balanceb. Adjusted trial balancec. Balance sheetd. All of these 50. When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?a. They should be inserted in alphabetical order into the trial balance accounts already given.b. They should be inserted in chart of account order into the trial balance already given.c. They should be inserted on the lines immediately below the trial balance totals.d. They should not be inserted on the trial balance until the next accounting period. 51. When using a worksheet, adjusting entries are journalizeda. after the worksheet is completed and before financial statements are prepared.b. before the adjustments are entered on to the worksheet.c. after the worksheet is completed and after financial statements have been prepared.d. before the adjusted trial balance is extended to the proper financial statement columns.More Questions are Included…