Acc557 Financial Accounting: Week 4 Chapter 4 Study Guide

Note: Please compare the questions outlined below with your own questions to make sure it's the same. There are other versions of the same quiz.

Acc557 Financial Accounting
Week 4 Chapter 4 Study Guide

1. IFRS Multiple Choice Question 239
IFRS requires the use of
the term balance sheet.
the term statement of financial position.
neither balance sheet nor statement of financial position, but recommends use of the term balance sheet.
neither balance sheet nor statement of financial position, but recommends use of the term statement of financial position.

2. Multiple Choice Question 99
A post-closing trial balance will show
zero balances for all accounts.
the amount of net income (or loss) for the period.
only permanent account balances.
only temporary account balances.

3. Multiple Choice Question 106
The heading for a post-closing trial balance has a date line that is similar to the one found on
the worksheet.
a balance sheet.
an income statement.
an retained earnings statement

4. Multiple Choice Question 70
The income summary account
is a permanent account.
appears on the balance sheet.
appears on the income statement.
is a temporary account.

5. Multiple Choice Question 69
Closing entries are
made to close permanent or real accounts.
posted to the ledger accounts from the worksheet.
journalized in the general journal.
an optional step in the accounting cycle.

6. Question 80
The final closing entry to be journalized is typically the entry that closes the
expense accounts.
Dividends account.
revenue accounts.
Retained Earnings account.

7. Question 125
On March 8, Black Candy Company bought supplies on account from the Arcade Fire Company for $880. Black Candy Company incorrectly debited Equipment for $800 and credited Accounts Payable for $800. The entries have been posted to the ledger. The correcting entry should be:
Supplies..................................... 880
Accounts Payable............... 800
Equipment......................... 80
Supplies..................................... 880
Accounts Payable............... 880
Supplies..................................... 880
Equipment......................... 880
Supplies..................................... 880
Equipment......................... 800
Accounts Payable............... 80

8. IFRS Multiple Choice Question 242
Under IFRS and under GAAP, current assets are listed in
IFRS GAAP
reverse order of liquidity reverse order of liquidity
reverse order of liquidity order of liquidity
order of liquidity order of liquidity
order of liquidity reverse order of liquidity

9. Multiple Choice Question 112
Which of the following steps in the accounting cycle may be performed most frequently?
Prepare a trial balance.
Post closing entries.
Prepare a post-closing trial balance.
Journalize closing entries.

10. Multiple Choice Question 97
A post-closing trial balance is prepared
after closing entries have been journalized and posted.
before closing entries have been journalized and posted.
before closing entries have been journalized but after the entries are posted.
after closing entries have been journalized but before the entries are posted.

11. Multiple Choice Question 151
The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2013:
Accounts payable $ 19,000
Accounts receivable 11,000
Accumulated depreciation – equipment 28,000
Advertising expense 21,000
Cash 11,000
Common stock 40,000
Depreciation expense 12,000
Dividends 14,000
Insurance expense 3,000
Note payable, due 6/30/14 70,000
Prepaid insurance (12-month policy) 6,000
Rent expense 17,000
Retained earnings (1/1/13) 65,000
Salaries and wages expense 32,000
Service revenue 125,000
Supplies 4,000
Supplies expense 6,000
Equipment 210,000
What are total current assets at December 31, 2013?
$38,000
$32,000
$26,000
$28,000

12. Multiple Choice Question 148
The most important information needed to determine if companies can pay their current obligations is the
net income for this year.
relationship between current assets and current liabilities.
projected net income for next year.
relationship between short-term and long-term liabilities.

13. Multiple Choice Question 131
The following information is for Bright Eyes Auto Supplies:
Bright Eyes Auto Supplies
Balance Sheet
December 31, 2013
Cash $ 20,000 Accounts Payable $ 65,000
Prepaid Insurance 40,000 Salaries and Wages Payable 25,000
Accounts Receivable 50,000 Mortgage Payable 75,000
Inventory 70,000 Total Liabilities $165,000
Land Held for Investment 90,000
Land 125,000
Building $100,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000 370,000
Depreciation (30,000) 70,000
Trademark 70,000 Total Liabilities and
Total Assets $535,000 Stockholders' Equity $535,000
The total dollar amount of assets to be classified as property, plant, and equipment is
$225,000.
$285,000.
$195,000.
$315,000.

14. Multiple Choice Question 173
Current liabilities
are listed in the balance sheet in order of their expected maturity.
should not include long-term debt that is expected to be paid within the next year.
are obligations that the company is to pay within the forthcoming year.
are listed in the balance sheet, starting with accounts payable.

15. Question 91
The income statement for the year 2013 of Fugazi Co. contains the following information:
Revenues $70,000
Expenses:
Salaries and Wages Expense $45,000
Rent Expense 12,000
Advertising Expense 8,000
Supplies Expense 6,000
Utilities Expense 2,500
Insurance Expense 2,000
Total expenses 75,500
Net income (loss) ($5,500)
The entry to close the expense accounts includes a
debit to Salaries and Wages Expense for $2,500.
debit to Income Summary for $75,500.
debit to Income Summary for $5,500.
credit to Income Summary for $5,500.
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