Question 1

Round tripping is a fraudulent scheme where business A artificially inflates revenue by lending money to customer B who uses that money to buy products from A.

Accepted Answer

A) True 
 B)False

Question 2

The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a work sheet

Accepted Answer

A)   is the amount of net income or loss
B)   indicates there is an error on the work sheet
C)   is the amount of retained earnings
D)   is the difference between revenue and expensesE) All of the above
F) B) and C)

Question 3

Which of the following account groups are all considered nominal accounts?

Accepted Answer

A)   Cash, Owner's Equity, Wages Payable
B)   Prepaid Insurance, Property, Plant & Equipment, Fees Earned
C)   Capital Account, Dividend Account, Income Summary
D)   Rent Revenue, Fees Earned, Miscellaneous ExpenseE) A) and B)
F) None of the above

Question 4

The most important output of the accounting cycle is the financial statements.

Accepted Answer

A) True 
 B)False

Question 5

Accrued expenses are ordinarily listed on the balance sheet as current assets.

Accepted Answer

A) True 
 B)False

Question 6

The proper sequence of steps in the accounting cycle is as follows

Accepted Answer

A)   analyze and record transactions, post transaction to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries
B)   prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger
C)   analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and finally prepare a post-closing trial balance
D)   prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entriesE) C) and D)
F) B) and D)

Question 7

When accounts do appear on the unadjusted trial balance but are needed to post adjustments, they are simply added to the account title column.

Accepted Answer

A) True 
 B)False

Question 8

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
  Prepare the entry required to close the revenue accounts at the end of the period.

Accepted Answer

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Question 9

The amount of the net income for a period appears on both the income statement and the balance sheet for that period.

Accepted Answer

A) True 
 B)False

Question 10

The balance in the capital account on the worksheet will equal the amount presented in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

The Balance Sheet should be prepared

Accepted Answer

A)   before the income statement and the statement of owner's equity
B)   before the income statement and after the statement of owner's equity
C)   after the income statement and the statement of owner's equity
D)   after the income statement and before the statement of owner's equityE) B) and D)
F) All of the above

Question 12

The chart of accounts, the journal, and the ledger are essential parts of the accounting system.

Accepted Answer

A) True 
 B)False

Question 13

The income statement should be prepared

Accepted Answer

A)   before the statement of owner's equity and balance sheet
B)   after the statement of owner's equity and before the balance sheet
C)   after the statement of owner's equity and balance sheet
D)   after the balance sheet and before the statement of owner's equityE) A) and D)
F) A) and C)

Question 14

The closing process is sometimes referred to as closing the books.

Accepted Answer

A) True 
 B)False

Question 15

All income statement accounts will be closed at the end of the period.

Accepted Answer

A) True 
 B)False

Question 16

Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.

Accepted Answer

A) True 
 B)False

Question 17

In the accounting cycle, the last step is

Accepted Answer

A)   preparing the financial statements
B)   journalizing and posting the adjusting entries
C)   preparing a post-closing trial balance
D)   journalizing and posting the closing entriesE) None of the above
F) A) and B)

Question 18

It is necessary to post the closing entries to the general ledger.

Accepted Answer

A) True 
 B)False

Question 19

The following are steps in the accounting cycle. Of the following, which would be prepared last?

Accepted Answer

A)   An adjusted trial balance is prepared.
B)   Transactions are posted to the ledger.
C)   An unadjusted trial balance is prepared.
D)   Adjusting entries are journalized and posted to the ledger.E) None of the above
F) A) and D)

Question 20

On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount.

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010. Prepare the entry required to close the revenue accounts at the end of the period.

Correct Answerverified_TB2085_00...View AnswerShow Answer

The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a work sheet

Correct AnswerverifiedShow Answer

All income statement accounts will be closed at the end of the period.

Correct AnswerverifiedShow Answer

The amount of the net income for a period appears on both the income statement and the balance sheet for that period.

Correct AnswerverifiedShow Answer

In the accounting cycle, the last step is

Correct AnswerverifiedShow Answer

On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount.

Correct AnswerverifiedShow Answer

Accrued expenses are ordinarily listed on the balance sheet as current assets.

Correct AnswerverifiedShow Answer

Which of the following account groups are all considered nominal accounts?

Correct AnswerverifiedShow Answer

The Balance Sheet should be prepared

Correct AnswerverifiedShow Answer

Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.

Correct AnswerverifiedShow Answer

The proper sequence of steps in the accounting cycle is as follows

Correct AnswerverifiedShow Answer

Round tripping is a fraudulent scheme where business A artificially inflates revenue by lending money to customer B who uses that money to buy products from A.

Correct AnswerverifiedShow Answer

The closing process is sometimes referred to as closing the books.

Correct AnswerverifiedShow Answer

The most important output of the accounting cycle is the financial statements.

Correct AnswerverifiedShow Answer

When accounts do appear on the unadjusted trial balance but are needed to post adjustments, they are simply added to the account title column.

Correct AnswerverifiedShow Answer

The balance in the capital account on the worksheet will equal the amount presented in the balance sheet.

Correct AnswerverifiedShow Answer

The income statement should be prepared

Correct AnswerverifiedShow Answer

The chart of accounts, the journal, and the ledger are essential parts of the accounting system.

Correct AnswerverifiedShow Answer

It is necessary to post the closing entries to the general ledger.

Correct AnswerverifiedShow Answer

The following are steps in the accounting cycle. Of the following, which would be prepared last?

Correct AnswerverifiedShow Answer

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