1.A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the:

a)Operating cycle of a business.

b)Timeliness principle.

c)Going-concern principle.

d)Matching principle.

e)Accrual basis of accounting.

f)Other:_______________

2.A classified balance sheet organizes assets and liabilities into important subgroups.

a)True

b)False

3.Interim financial reports are financial reports:

a)Covering less than one year, usually based on one- or three-month periods.

b)That are prepared before any adjustments have been recorded.

c)That show the assets above the liabilities and the liabilities above the equity.

d)In which revenues are reported in the income statement when cash is received and expenses are reported when cash is paid.

e)In which the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues.

f)Other: __________________

4.Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle.

a)True

b)False

c)Other:_________

5.Current liabilities are cash and other resources that are expected to be sold, collected, or used within the longer of one year or the company's operating cycle.

a)True

b)False

6.Assets are classified into current assets, investments, property, plant and equipment, and intangible assets.

a)True

b)False

7.The 12-month period that ends when a company's activities are at their lowest point is called the:

a)Fiscal Year

b)Natural business year

c)Calendar Year

d)Accounting period

e)Interim period.

f)Other: _____________

8.The main purpose of adjusting entries is to:

a)Record external transactions and events.

b)Record internal transactions and events.

c)Recognize revenues received during the period.

d)Recognize expenses paid during the period.

e)Adjust assets to their market value.

f)Other: _________________

9.The timeliness principle assumes that an organization's activities can be divided into specific time periods including:

a)One month.

b)Quarters.

c)Fiscal year.

d)Calendar year.

e)Any of the above.

f)Other: _______________

10.An unclassified balance sheet provides more information to users than a classified balance sheet.

a)True

b)False