KNOWLEDGE CHECK-UP 1. The temporary account used only in the closing process to hold the amounts of revenues and expenses before the net difference is added or subtracted from the owner's capital account is called the a. Closing account b. Contra account c. Balance column account d. Income summary account 2. Which of the following statements is te about work sheets: panies that financial statements a. They are required and must be prepared by all cle b. They are optional working papers that can simplify the accountant's efforts in producing financial statements c. They are produced without the use of a computer d. They do not show the adjustments made to produce the adjusted trial balance

1. The temporary account used only in the closing process to hold the amouns of revenues and expenses before the net difference is added or subtracted from the owner's capital account is called the a. Closing account b. Contra account c. Balance column account d. Income summary account 2. Which of the following statements is trae abour was sheers. a. They are required and must be prepored by all core panies that produce financial statements b. They are optional working papers that can simplafy the accountant's efforts in producing financial statemethl c. They are produced without the use of a computet d. They do not show the adjustments made to prodice the adjusted rrial balance 3. 1he choding process is: a. A nquired step at the end of the accounting period afer the financial sareiments are prepaicel b. An sptonal step thed to anslyze the flnancial state ments at the end of an accounting period c. Netormed at the beguning of the accounting petiod toclowe inactive cusromer accounts d. Nerformed to close the accounting system at the end de the business day. 2. in the closing process temporary accounts are used for which of the following reasons a. To mecord transkctions remporanly, preparting for adlusuing entries b. To kecp track of ane time only or unique transactions c. To cloge all accounts that are reset to zero to prepare for the next accoumting period d. Fo manage periodend adjustments 5. Nin example of a pemanent account is a. Withdrawals b. Reventse c. Utlities Expense d. Cash 6. The incorne Summary account is used for the following purpose: 2. To transfer the permanent accounts to the owner's capital account at the end of an accounting period b. To keep rrack of the profitability of an organization during the accounting period c. To transfer the credit balances and debit balances in temponary accounts and to transfer the net balance to the owmers' capital account d. To ensure the accounting software package is summatizing financial information correctly during the sccounting period 7. The purpose of a post-closing trial balance is: 2. To list all permanent accounts and their balances after all clasing entries are posted b. To hst all temporary accounts and their balances after all closing entries are posted of an accoutuirie periet. d. To prepure fruricial cextromenti en the mad of in accounting peritud 8. A clatuned balence sheer bwilves a. Grouping assets and lubetitien ithto curters ind non current assets and liaticica Providirie mote deteled infotmutiot fereuding x coen b. Providireg mote detaled infotinatichs pany/s extsting arets and latilities c. Presenting the balance sheet in a specific focmut, bused on the starndard by induntry d. Organizing the-revenue and ropente line trins froen largest to smalles 9. An operating cycle is a. The average time it takes to produce a groduct for a marnufacturing baced cocmparyy b. The average time it takes a company to pay of operat ing expenses during a fiscal year c. The average length of ume berween payding eniployeen (for a service-based organization) or purchasing invea. tory (for a merchatidising company) and recelivingeath from customers d. The average length of time between imsesing in R6D and the time to product development fot a canpuny 10. An example of a current ascet is: a. Intangible assets b. Property, plant, and equipment c. Accounts payable d. Merchandise inventory 11. The current ratio provides information to users of financial statements regarding; a. Abtlity to pay for existing assets with day-to-diy obligations b. Abllity to pay day-ro-day obligations with existing liquid assets c. The amount of debt outstanding compured to total equity in a business d. The amount of cash curtently avalable to pay for all outstanding obligations of a business