1.The asset section of a classified balance sheet includes *

a.Current liabilities, long-term investments, property, plant and equipment, and intangible assets.

b.Current assets, non-current assets, equity, and intangible assets.

c.Current assets, long-term investments, property, plant and equipment, and intangible assets.

d.Current assets, liabilities, property, plant and equipment, and intangible assets.

e.Current assets, long-term investments, property, plant and equipment, and withdrawals.

2.The general journal provides a place for recording *

a.an explanation of the transaction

b.the amount of each debit and credit

c.All of these

d.the names of the accounts involved

e.the transaction date

3.The adjusting entry to record the earned but unpaid salaries of employees at the end of the accounting period is *

a.Debit Salaries Expense and credit Salaries Payable

b.Debit Unpaid Salaries and credit Salaries Payable

c.Debit Cash and credit Salaries Expense

d.Debit Salaries Payable and credit Salaries Expense

e.Debit Salaries Expense and credit Cash

4.Which of the following is the final step in the accounting cycle? *

a.Journalizing

b.Preparing a post-closing trial balance

c.Preparing the statements

d.Preparing a work sheet

e.Preparing an adjusted trial balance

5.Which financial statement shows whether the business earned a profit or loss, and also lists the types and amounts of the revenues and expenses? *

a.Statement of financial position

b.Balance sheet

c.Statement of changes in equity

d.Statement of cash flow

e.Income statement.

6.The most flexible type of journal that can be used to record any kind of transaction is called a *

a.Ledger

b.Chart of accounts

c.Balance column account

d.General Journal

e.Trial balance

7.Salaries paid with cash appear on which of the following statement(s)? *

a.Statement of changes in equity

b.Balance sheet

c.Statement of cash flow.

d.Income statement

e.Both an income statement and statement of cash flows

8.A classified balance sheet *

a.Organizes assets and liabilities into important subgroups

b.Shows the effect of profit and withdrawals on owner's capital

c.Measures a company's ability to pay its bills on time

d.Presents revenues, expenses and profit

e.Shows operating, investing, and financing activities

9.Which statement is true about liquidity? Prepaid Rent is *

a.Less liquid that inventories

b.Less liquid than land

c.Less liquid than rent revenue

d.More liquid than cash

e.More liquid than inventories

9.1 .Which of the following is not considered a basic type of adjusting entry? *

a.An entry to accrue unpaid expenses

b.An entry to convert an asset to a liability

c.An entry to convert an asset to an expense

d.An entry to convert a liability to a revenue

e.An entry to accrue uncollected revenue

10.The remaining balance in Prepaid Insurance on December 31, 2021 of $12,600 was for a six-month insurance policy purchased for $16,800 and in effect on July 1, 2020. What is the required adjustment amount on December 31st? *

a.$8,750

b.$4,750

c.$5,000

d.$4,500

e.$2,800

11.Current Liabilities *

a.Are listed in the order in which they are to be paid, with the first one listed to be paid first

b.Are listed in order of liquidity

c.Are due to be settled after one year or the operating cycle

d.Are due to be settled within the shorter of one year or the operating cycle

e.Are closed at the end of the accounting period to current assets

12.A balance column ledger account is *

a.A simple form of account that is widely used in accounting education to illustrate the debits and credits required in recording a transaction

b.Another name for the withdrawals account

c.An account with debit and credit columns for recording entries and a third column for showing the balance of the account after each entry is posted

d.An account used to record the transfers of assets from a business to its owner

e.An account entered on the balance sheet

13.Accrued revenues *

a.Are paid in advance

b.Are also called unearned revenues

c.At the end of one accounting period often result in cash payments in the next period

d.Are listed on the balance sheet as liabilities

e.At the end of one accounting period often result in cash receipts from customers in the next period

14.A financial statement providing information that helps users understand a company's financial status at a specific date, is called a(n) *

a.bank statement

b.balance sheet

c.income statement

d.statement of changes in equity

e.statement of cash flows

15.A ledger is *

a.A book in which a complete record of transactions is recorded and from which transaction amounts are posted to the accounts

b.A book of original entry

c.Another name for the bank account

d.A journal in which transactions are first recorded

e.A book of final entry

16.The process of copying journal information to the ledger is called *

a.journalizing

b.double-entering

c.an external business transaction

d.posting

e.an internal business transaction

17.On December 1, your company paid its insurance agent $2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. The $2,400 payment was recorded on December 1 with a debit to the income statement account Insurance Expense and a credit to the current asset Cash. Your company prepares monthly financial statements at the end of each calendar month. The entry to be made at the December 31 month end to adjust the accounts is *

a.Debit Insurance Expense 2400; Credit Prepaid Insurance 2400

b.Debit Prepaid insurance 2200; Credit Insurance Expense 2200

c.Debit Insurance Expense 200; Credit Prepaid Insurance 200

d.Debit Prepaid Insurance 200; Credit Insurance Expense 200

e.Debit Insurance Expense 2200; Credit Prepaid Insurance 2200

18.A compound journal entry is *

a.A journal entry involving at least two accounting periods

b.A journal entry that has three or more debits and three or more credits

c.A journal entry that affects at least four accounts

d.A journal entry involving only two ledger accounts

e.A journal entry that affects at least three account

19.An obligation of a business that represents the claims of others against the assets of the business is called a(n) *

a.revenue

b.equity

c.expense

d.asset

e.liability

20.Costs incurred or the using up of assets as a result of the main operations of a business are called *

a.equity

b.expenses

c.liabilities

d.net losses

e.revenues

21.HCF, a finance company, lends Able Business $12,000 at 5% on December 1, 2020. HCF's adjusting entry on December 31, 2020, should include *

a.A debit to Cash for $600

b.A debit to Interest Expense for $600

c.A credit to Interest Receivable for $50

d.A credit to Interest Earned for $50

e.A debit to Interest Earned for $50

22.The ending balance of owner's capital is calculated as *

a.Owner's capital account balance minus loss plus the withdrawals account balance

b.Assets plus liabilities

c.Profit minus the withdrawals account balance

d.None of these answers is correct.

e.Owner's capital account balance plus profit minus the withdrawals account balance

23.Welder Company purchases supplies from Plumber Company on account. The entry for this transaction will include a *

a.Credit to Accounts Receivable for Welder Company

b.Debit to Accounts Receivable for Welder Company

c.Debit to Accounts Receivable for Plumber Company

d.Debit to Accounts Payable for Welder Company

e.Credit to Accounts Payable for Plumber Company

24.A column in journals and accounts used to cross reference journal and ledger entries is called the *

a.credit

b.posting reference

c.account balance

d.debit

e.description

25.The normal order for the asset section of a classified balance sheet is *

a.Intangible assets, current assets, long-term investments, property, plant and equipment

b.Property, plant and equipment, intangible assets, long-term investments, current assets

c.Current assets, prepaid expenses, long-term investments, intangible assets

d.Long-term investments, current assets, property, plant and equipment, intangible assets

e.Current assets, long-term investments, property, plant and equipment, intangible assets

26.Cash investments by owners are listed on which of the following statement(s)? *

a.Balance sheet

b.Statement of cash flows

c.Income statement

d.Statement of changes in equity

e.Both a statement of changes in equity and statement of cash flows

27.If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on January 5 would include *

a.A debit to Cash and a credit to Prepaid Salaries

b.A debit to Salaries Payable and a credit to Salaries Expense

c.A debit to Salaries Payable and a credit to Cash

d.No entry would be necessary on January 5

e.A debit to Cash and a credit to Salaries Payable

28.A book of original entry is *

a.Also called a ledger

b.Sometimes called a book of final entry

c.Another name for the cash account

d.A book in which amounts are posted from a journal

e.Another name for the general journal

29.Payments of cash by a corporation to its shareholders are called *

a.shareholder's equity

b.withdrawals

c.cheques

d.expenses

e.dividends

30.Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are called *

a.Prepaid expenses

b.Accounts payable

c.Accrued expenses

d.Operating expense

e.Unearned expense

31.A journal in which transactions are first recorded is *

a.a ledger

b.the cash ledger

c.a book of original entry

d.a revenue account

e.a book of final entry

32.The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures revenue as the amount of cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services is called the *

a.historical cost principle

b.recognition principle

c.going concern principle

d.currency principle

e.business entity principle

33.Reversing entries are *

a.Used to simplify a company's record keeping

b.Optional

c.Dated the first day of the next accounting period

d.Linked to accrued assets and liabilities that were created by adjusting entries at the end of the previous accounting period

e.All of these

34.An exchange of economic consideration between two parties that causes a change in assets, liabilities or equity is called *

a.liabilities.

b.external transactions

c.prepaid expenses

d.source documents

e.business transaction

35.Current liabilities become due *

a.All of these

b.Within the operating cycle of a business

c.Within one year

d.A or B, whichever is longer

e.When bills have to be paid

36.A business pays each of its two office employees each Friday at the rate of $60 per day for a five-day week that begins on Monday. If the accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the adjusting entry to record the salaries earned but unpaid is *

a.Debit Salaries Expense $240 and credit Cash $240

b.Debit Office Salaries Expense $120 and credit Salaries Payable $120

c.Debit Salaries Payable $240 and credit Office Salaries Expense $240

d.Debit Unpaid Salaries $120 and credit Salaries Payable $120

e.Debit Office Salaries Expense $240 and credit Salaries Payable $240

37.In January, Denton Mabrey College received $120,000 in Unearned Tuition Revenue from its students for the spring semester, which lasts four months. On January 31, the college should recognize which amount for tuition revenue? *

a.$120,000

b.$60,000

c.$90,000

d.$80,000

e.$30,000

38.Profit appears on which of the following statement(s)? *

a.Statement of cash flows

b.Both an income statement and statement of changes in equity

c.Balance sheet

d.Income statement

e.Statement of changes in equity

39.The current ratio *

a.Helps to assess a company's ability to pay its debts in the near future

b.All of these

c.Suggests there may be problems in a business if it is less than 1

d.Is current assets divided by current liabilities

e.Is a measure of a company's liquidity