Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. Chapter 4 1

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 1. Which part of the accounting cycle provides information to help a business decide whether to expand its operations? a. Post-closing trial balance b. Adjusting entries c. Closing entries d. Financial statements 2

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 2. Which columns of the accounting worksheet show unadjusted amounts? a. Adjustments b. Trial balance c. Income statement d. Balance sheet 3

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 3. Which of the following accounts may appear on a post-closing trial balance? a. Cash, Salary payable, and Capital b. Cash, Salary payable, and Service revenue c. Cash, Service revenue, Salary expense d. Cash, Salary payable, and Salary expense 4

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 4. Which situation indicates a net loss within the income statement columns of the worksheet? a. Total credits exceed total debits. b. Total debits exceed total credits. c. Total debits equal total credits. d. None of the above are true. 5

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 5. Supplies has an $10,000 unadjusted balance on your trial balance. At year-end, you count supplies of $6,000. What adjustment will appear on your worksheet? a.Supplies4,000 Supplies expense4,000 b.Supplies expense6,000 Supplies6,000 c.Supplies expense4,000 Supplies4,000 d.No adjustment is needed because the Supplies account already has a correct balance. 6

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 6. Which of the following accounts is not closed? a. Depreciation expense b. Drawing c. Service revenue d. Accumulated depreciation

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 7. What do closing entries accomplish? a. Zeroes out the revenue, expense, and drawing accounts b. Transfers revenues, expenses, and dividends to Capital c. Brings the Capital account to its correct ending balance d. All of the above 8

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 8. Which of the following is not a closing entry? a.Capital XXX DividendsXXX b.Service revenueXXX Income summaryXXX c.Salary payableXXX Income summaryXXX d.Income summaryXXX Rent expenseXXX 9

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 9. Assets and liabilities are listed on the balance sheet in order of their a. purchase date. b. adjustments. c. liquidity. d.balance. 10

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 10. Clean Air Systems has Cash of $600, Receivables of $900, and Supplies of $400. Clean Air owes $500 on Accounts payable and Salary payable of $200. Clean Air’s current ratio is: a b c d

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. 12 Copyright All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.