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ACC 557 Quiz Chapter 4 Week 4 Solutions Perfect Help
A worksheet is a mandatory form that must be prepared along
with an income statement and balance sheet.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
If a worksheet is used, financial statements can be prepared
before adjusting entries are journalized.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
If total credits in the income statement columns of a
worksheet exceed total debits, the enterprise has net income.
Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem
Solving, IMA: Reporting
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.
Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting
The adjustments on a worksheet can be posted directly to the
accounts in the ledger from the worksheet.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
The adjusted trial balance columns of a worksheet are
obtained by subtracting the adjustment columns from the trial balance columns.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
The balance of the depreciation expense account will appear
in the income statement debit column of a worksheet.
Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
Closing entries are unnecessary if the business plans to
continue operating in the future and issue financial statements each year.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving,
IMA: FSA
The Dividends account is closed to the Income Summary
account in order to properly determine net income (or loss) for the period.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving,
IMA: FSA
After closing entries have been journalized and posted, all
temporary accounts in the ledger should have zero balances.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving,
IMA: FSA
Closing revenue and expense accounts to the Income Summary
account is an optional bookkeeping procedure.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving,
IMA: FSA
Closing the Dividends account to Retained Earnings is not
necessary if net income is greater than dividends during the period.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
The Dividends account is a permanent account whose balance
is carried forward to the next accounting period.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
Closing entries are journalized after adjusting entries have
been journalized.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving,
IMA: FSA
The amounts appearing on an income statement should agree
with the amounts appearing on the post-closing trial balance.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
The post-closing trial balance is entered in the first two
columns of a worksheet.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
A business entity has only one accounting cycle over its
economic existence.
Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
The accounting cycle begins at the start of a new accounting
period.
Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
Both correcting entries and adjusting entries always affect
at least one balance sheet account and one income statement account.
Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
Correcting entries are made any time an error is discovered
even though it may not be at the end of an accounting period.
Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
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.
Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
In a corporation, Retained Earnings is a part of owners'
equity.
Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
A company's operating cycle and fiscal year are usually the
same length of time.
Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem
Solving, IMA: FSA
Cash and supplies are both classified as current assets.
Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
Long-term investments would appear in the property, plant,
and equipment section of the balance sheet.
Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None,
AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving,
IMA: Reporting
A liability is classified as a current liability if the
company is to pay it within the forthcoming year.
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