财务会计英语 练习及答案ch04(2)

Chapter 4—Completing the Accounting Cycle

29. Capital and Drawing are reported in the owner's equity section of the balance sheet.

ANS: F DIF: 2 OBJ: 03

30. Deferred expenses that benefit a relatively short period of time are listed on the balance sheet

as current assets.

ANS: T DIF: 2 OBJ: 03

31. Unearned revenues that will be earned in a relatively short period of time are listed on the

balance sheet as current assets.

ANS: F DIF: 2 OBJ: 03

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

ANS: F DIF: 2 OBJ: 03

33. Accrued revenues are ordinarily listed on the balance sheet as current liabilities.

ANS: F DIF: 2 OBJ: 03

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

balance sheet.

ANS: F DIF: 3 OBJ: 03

35. Examples of temporary accounts are supplies and prepaid expenses which are in the ledger for

just a short time before they expire.

ANS: F DIF: 2 OBJ: 04

36. Accumulated Depreciation is a permanent account.

ANS: T DIF: 1 OBJ: 04

37. The drawing account is a temporary account.

ANS: T DIF: 1 OBJ: 04

38. The balance sheet accounts are referred to as real or permanent accounts.

ANS: T DIF: 2 OBJ: 04

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Chapter 4—Completing the Accounting Cycle

39. Since the adjustments are entered on the work sheet, it is not necessary to record them in the

journal or post them to the ledger.

ANS: F DIF: 2 OBJ: 04

40. Journalizing and posting the adjustments and closing entries updates the ledger for the new

accounting period.

ANS: T DIF: 1 OBJ: 04

41. The income summary account is closed to the owner's capital account.

ANS: T DIF: 1 OBJ: 04

42. The accumulated depreciation account is closed to the income summary account.

ANS: F DIF: 2 OBJ: 04

43. The drawing account is closed to the income summary account.

ANS: F DIF: 2 OBJ: 04

44. The trial balance prepared after all the closing entries have been posted is called a pre-closing

trial balance.

ANS: F DIF: 2 OBJ: 04

45. Entries required to close the balances of the temporary accounts at the end of the period are

called final entries.

ANS: F DIF: 1 OBJ: 04

46. In a sole proprietorship, a closing entry for the drawing account may not be necessary.

ANS: F DIF: 3 OBJ: 04

47. Journalizing and posting closing entries must be completed before financial statements can be

prepared.

ANS: F DIF: 2 OBJ: 04

48. During the closing process, some balance sheet accounts are closed to zero.

ANS: F DIF: 2 OBJ: 04

49. Closing entries are entered directly on to the work sheet.

ANS: F DIF: 1 OBJ: 04

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Chapter 4—Completing the Accounting Cycle

50. The post-closing trial balance will generally have fewer accounts than the trial balance.

ANS: T DIF: 2 OBJ: 04

51. A post-closing trial balance contains only asset and liability accounts.

ANS: F DIF: 2 OBJ: 04

52. A post-closing trial balance should be prepared before the financial statements are prepared.

ANS: F DIF: 2 OBJ: 04

53. Any twelve-month accounting period adopted by a company is known as its fiscal year.

ANS: T DIF: 1 OBJ: 05

54. A fiscal year that ends when business activities have reached their lowest point is called the

natural business year.

ANS: T DIF: 1 OBJ: 05

55. Solvency is essentially the ability of an organization to pay its bills.

ANS: T DIF: 1 OBJ: 06

56. Working capital is current assets plus current liabilities.

ANS: F DIF: 1 OBJ: 06

57. Current ratio is current assets divided by current liabilities.

ANS: T DIF: 1 OBJ: 06

58. Reversing entries are required of all adjusting entries.

ANS: F DIF: 1 OBJ: App

59. Immediately after the reversing entry for accrued salary has been posted, the salary expense

account will have a credit balance.

ANS: T DIF: 3 OBJ: App

60. The use of reversing entries is optional.

ANS: T DIF: 2 OBJ: app

61. When reversing entries are made, all accrual adjustments will be reversed.

92

Chapter 4—Completing the Accounting Cycle

ANS: T

DIF: 3 OBJ: app

MULTIPLE CHOICE

1. In the accounting cycle, the last step is

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 entries

ANS: C DIF: 2 OBJ: 01

2. The worksheet

a. is an integral part of the accounting cycle

b. eliminates the need to rewrite the financial statements c. is a working paper that is required

d. is used to summarize account balances and adjustments for the financial statements

ANS: D DIF: 2 OBJ: 02

3. Which one of the steps below is not aided by the preparation of the work sheet? a. preparing the adjusted trial balance b. posting to the general ledger

c. preparing the financial statements d. preparing the closing entries

ANS: B DIF: 2 OBJ: 02

4. A work sheet includes columns for a. adjusting entries b. closing entries c. reversing entries d. both a and b

ANS: A DIF: 1 OBJ: 02

5. When a work sheet is complete, the adjustment columns should have a. total credits greater than total debits if a net income was earned b. total debits grater than total credits if a net loss was incurred c. total debits greater than total credits if a net income was earned d. total debits equal total credits

ANS: D DIF: 2 OBJ: 02

93

Chapter 4—Completing the Accounting Cycle

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

a. is the amount of net income or loss

b. indicates there is an error on the work sheet c. is not unusual when preparing the work sheet

d. is the net difference between revenue, expenses, and drawing

ANS: B DIF: 2 OBJ: 02

7. Net income appears on the work sheet in the a. debit column of the Balance Sheet columns b. debit column of the Adjustments columns

c. debit column of the Income Statement columns d. credit column of the Income Statement columns

ANS: C DIF: 2 OBJ: 02

8. A net loss appears on the work sheet in the a. debit column of the Balance Sheet columns b. credit column of the Balance Sheet columns c. debit column of the Income Statement columns d. credit column of the Adjustments columns

ANS: A DIF: 2 OBJ: 02

9. After net income is entered on the work sheet, the Balance Sheet debit and credit columns must

a. be the same amount as the total amount of the Income Statement debit and credit columns

b. equal each other

c. be the same amount as the total amount in the Adjusted Trial Balance debit and credit columns

d. not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet

ANS: B DIF: 2 OBJ: 02

10. Which of the statements below indicates that a company earned a net income for the period?

a. The sum of the debits exceeds the sum of the credits in the Balance Sheet columns on the work sheet.

b. The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.

c. The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet.

d. Cash inflows exceeded cash outflows.

ANS: B

94

DIF: 3 OBJ: 02

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