Question $1$: $10$ marks B$.$ All of the following are equity accounts except

a$.$ Retained Earnings.

b$.$ Accounts Payable.

c$.$ Share Capital.

d$.$ Dividends.

Question $2$: $10$ marks

Part $2\mathrm{.}1$: True $-$ False Statements $(3$ marks$)$

If a worksheet is used, financial statements can be prepared before adjusting entries are

journalized.

Intangible assets are generally the first items listed on a classified statement of financial

position.

When goods are purchased with freight terms of FOB Destination, the seller pays the freigh

costs.

Part $2\mathrm{.}2$: Multiple Choice Questions $(7$ marks$)$

Companies generally journalize and post closing entries only at

a$.$ the beginning of the annual accounting period.

b$.$ the middle of the annual accounting period.

c$.$ the end of the annual accounting period.

d$.$ any time during the annual accounting period.

Correcting entries are made

a$.$ at the beginning of an accounting period.

b$.$ at the end of an accounting period.

c$.$ whenever an error is discovered.

d$.$ after closing entries.

Liabilities are generally classified on a statement of financial position as

a$.$ small liabilities and large liabilities.

b$.$ present liabilities and future liabilities.

c$.$ current liabilities and non$-$current liabilities.

d$.$ tangible liabilities and intangible liabilities.

What is the order in which assets are generally listed on a classified statem

position?

a$.$ Current assets and long$-$term assets

b$.$ Intangible assets; long$-$term investments; property, plant, and equipment;

c$.$ Intangible assets; property, plant, and equipment; long$-$term investments;

d$.$ Long$-$term investments; property, plant, and equipment; intangible assets Part $3\mathrm{.}1$: True $-$ False Statements $(3$ marks$)$

Cash and office supplies are both classified as current assets.

Current assets are listed in the reverse order of liquidity on the statement of financial position.

Long$-$term investments include investments in shares of other companies and land held for

future use.

Part $3\mathrm{.}2$: Multiple Choice Questions $(7$ marks$)$

Which classification of assets will appear last in the Statement of Financial Position?

a$.$ Intangible Assets

b$.$ Current Assets

c$.$ Long$-$term Investments

d$.$ Property, Plant and Equipment

Which account will appear last under the current asset's classification on the statement

financial position?

a$.$ Accounts Receivable

b$.$ Prepaid Expenses

c$.$ Short$-$term investments

d$.$ Cash

Which of the following classification appears last under liability classification in the State

of Financial Position?

a$.$ Non$-$current Liabilities

b$.$ Current Liabilities

c$.$ Equity

d$.$ Reserves

Which of the following is in the proper order in which to list current assets?

a$.$ Cash; Short$-$term Investments: Accounts Receivable; Inventories: Supplies

b$.$ Cash; Short$-$term Investments: Inventories: Accounts Receivable: Supplies

c$.$ Supplies; Accounts Receivablesi Inventories; Short$-$term Investments; Cash

d$.$ Supplies; Inventories; Accounts Receivables; Short$-$term Investments; Cash

Aart h$\mathrm{.}1$ True $=$ False statements $(3$ marks$)$

You aluaus MUST make a worksheet in addition to the income statement and statement of

rinancial position.

A pertodic inventory system requires a detalled inventory record of inventory ltems.

Non$-$current liability is money that the company will pay back within a year.

Part $1\mathrm{.}2$: Multiple Cholce Questions $(7$ marks$)$

In a company's financial report $($statement of financial position$),$ equipment is classified as

a$.$ a current asset.

b$.$ property, plant, and equipment.

c$.$ an intangible asset.

When mistakes happen in a company's accounting records, how can they be fixed by using a

correcting entry?

a$.$ A correcting entry must involve one statement of financial position account and one

income statement account.

b$.$ A correcting entry may involve any combination of accounts.

c$.$ A correcting entry is the same as a closing entry.

d$.$ A correcting entry is a required step in the accounting cyele all the time even if there is no

mistake.

Assets are the things that the company own. A current asset is

a$.$ the last asset purchased by a business.

b$.$ an asset that a company expects to convert to cash or use up within one year.

c$.$ an asset that is currently being used to produce a product or service.

d$.$ usually found as a separate classification in the income statement.

A merchandising company that sells directly to consumers is a

a$.$ wholesaler.

b$.$ retaller.

c$.$ broker.

d$.$ service company.

In the income statement, net income from operations is gross profit less

a$.$ financing expenses.

b$.$ operating expenses.

c$.$ other income and expense.

d$.$ other expenses.

cost of goods sold is determined only at the end of the accounting period in

a$.$ a perpetual inventory system.

b$.$ a periodic inventory system.

c$.$ both a perpetual and a periodic inventory system.

d$.$ neither a perpetual nor a periodic inventory system.