Chapter 4

1.
	The entry to close the appropriate insurance account at the end of the accounting period is Student Response Value Correct Answer Feedback 1. debit Income Summary; credit Insurance Expense 100% 2. debit Income Summary; credit Prepaid Insurance 3. debit Prepaid Insurance; credit Income Summary 4. debit Insurance Expense; credit Income Summary Score: 1/1
2.
	Use the following worksheet to answer Questions 50-54. Finley Company Worksheet For the Year Ended December 31, 2010 Adjusted Trial Balance Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 30,000 30,000 Wages Payable 6,000 6,000 Capital Stock 4,000 4,000 Retained Earnings 29,000 29,000 Dividends 3,000 3,000 Fees Earned 141,000 141,000 Wages Expense 63,000 63,000 Rent Expense 18,000 18,000 Depreciation Expense 15,000 15,000 Totals 228,000 228,000 96,000 141,000 132,000 87,000 Net Income (Loss) 45,000 45,000 141,000 141,000 132,000 132,000 Based on the preceding trial balance, the ending balance in Retained Earnings is: Student Response Value Correct Answer Feedback 1. $29,000 0% 2. $71,000 3. $42,000 4. $77,000 Score: 0/1
3.
	The most important output of the accounting cycle is the financial statements. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1
4.
	All companies must use a calendar year as their fiscal year. Student Response Value Correct Answer Feedback 1. False 2. True 0% Score: 0/1
5.
	The following are steps in the accounting cycle. Of the following, which would be prepared last? Student Response Value Correct Answer Feedback 1. An unadjusted trial balance is prepared. 2. Adjusting entries are journalized and posted to the ledger. 3. An adjusted trial balance is prepared. 100% 4. Transactions are posted to the ledger. Score: 1/1
6.
	Unearned Fees appear on the Student Response Value Correct Answer Feedback 1. balance sheet as a current liability 100% 2. balance sheet in the current assets section 3. income statement as revenue 4. balance sheet in the stockholders’ equity section Score: 1/1
7.
	The Retained Earnings Statement should be prepared Student Response Value Correct Answer Feedback 1. before the income statement and balance sheet 2. before the income statement and after the balance sheet 3. after the income statement and balance sheet 4. after the income statement and before the balance sheet 100% Score: 1/1
8.
	The amount of the net income for a period appears on both the income statement and the balance sheet for that period. Student Response Value Correct Answer Feedback 1. True 0% 2. False Score: 0/1
9.
	The post-closing trial balance will generally have fewer accounts than the trial balance. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1
10.
	Which of the items below does not appear on the work sheet? Student Response Value Correct Answer Feedback 1. closing entries 100% 2. the unadjusted trial balance 3. adjusting entries 4. the dividend account Score: 1/1
11.
	The classified Balance Sheet will divide its Liabilities Section as the following subsections Student Response Value Correct Answer Feedback 1. Other Liabilities and Long-Term Liabilities 2. Current Liabilities and Other Liabilities 3. Present Liabilities and Tomorrow’s Liabilities 4. Current Liabilities and Long-Term Liabilities 100% Score: 1/1
12.
	Which one of the steps below is not aided by the preparation of the work sheet? Student Response Value Correct Answer Feedback 1. preparing the financial statements 2. preparing the adjusted trial balance 3. posting to the general ledger 100% 4. preparing the closing entries Score: 1/1
13.
	Accumulated Depreciation appears on the Student Response Value Correct Answer Feedback 1. balance sheet in the property, plant and equipment section 100% 2. balance sheet in the long-term liabilities section 3. balance sheet in the current assets section 4. income statement as an operating expense Score: 1/1
14.
	The balance in the retained earnings account on the worksheet will equal the amount presented in the balance sheet. Student Response Value Correct Answer Feedback 1. True 2. False 100% Score: 1/1
15.
	Accrued revenues are ordinarily listed on the balance sheet as current liabilities. Student Response Value Correct Answer Feedback 1. True 0% 2. False Score: 0/1
16.
	Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets. Student Response Value Correct Answer Feedback 1. False 2. True 100% Score: 1/1
17.
	The worksheet Student Response Value Correct Answer Feedback 1. eliminates the need to rewrite the financial statements 2. is used to summarize account balances and adjustments for the financial statements 100% 3. is a working paper that is required 4. is an integral part of the accounting cycle Score: 1/1
18.
	Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements. Student Response Value Correct Answer Feedback 1. False 2. True 100% Score: 1/1
19.
	The majority of businesses end their fiscal year on December 31. Student Response Value Correct Answer Feedback 1. False 2. True 100% Score: 1/1
20.
	Cross-referencing is useful in assuring that the debits and credits are in balance. Student Response Value Correct Answer Feedback 1. True 0% 2. False Score: 0/1