ANSWER THE FOLLOWING Complete the statement: closing entries ________ A. Reflect the net income for the accounting period B. Are also posted in the subsidiary ledgers C. Involve all ledger accounts D. Are recorded in the special journals Every adjusting entry affects ____________ A. Both a real and a nominal account B. Only nominal accounts C. Only real accounts D. Neither real or nominal accounts Financial statements must be prepared at least ________ A. Every two years B. Annually C. Quarterly D. Semi-annually In the accounting process, financial statements must be prepared _________ A. After the adjusting entries have been made B. Before the adjusting entries are made C. After preparing the post-closing trial balance D. After the adjusting and closing entries The following state ments pertain to a trial balance 1. It is prepared at the end of every accounting period after all the transactions for the period have been recorded and posted to the general ledger. 2. It provides evidence that the total debits in the general ledger equal total credits 3. It is a control device that helps eliminate accounting errors Which of the above statements is/are correct? A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 1, 2 and 3 The following pertains to financial statements 1. They are the means by which the information accumulated and processed in financial accounting is periodically communicated to the users 2. They are a structured financial representation of the financial position and financial performance of an entity Which of the above statement is/are correct? Statement 1 only B. Both statements 1 and 2 C. Statement 2 only D. Neither statement 1 nor statement 2 The purpose of the worksheet is to ____________ A. Facilitate the preparation of financial statements B. Showcase the capability of accountants C. Generate additional reports to management D. Have a place for journal entries Which of the following statement is correct relative to posting with use of special journals? A. The general ledger posting has to be ahead of subsidiary legder posting. B. The subsidiary ledger posting has to be ahead of general legder posting. C. The general ledger has to be coincide with the subsidiary ledger posting D. No subsidiary ledger posting is necessary Which of the following statement is correct relative to trial balance? A. The trial balance usually contains the account balances that should appear in the financial statements B. The trial balance proves that no errors have been made C. The trial balance provides information that is helpful when making adjusting entries. D. The trial balance is a summary taken directly from the genral journal Which of the following statement is not correct? A. The post reference/folio column serves as cross reference between the journal and the ledger B. The post reference/folio column of the affected account in the ledger contains the journal and journal page number from where the posting was taken C. The cross referencing in the post reference/folio column is done even before posting D. The post reference/folio column of the affected account in the journals contains the account number of the ledger account from where the entry was posted Which statement about the worksheet is not correct? A. Resulting net income or net loss is reflected in the worksheet B. The difference betwwen the total debits and total credits in the income statement column has to be the same as the difference between the total debits and total credits in the balance sheet columns C. The adjusting entries are entered in the worksheet D. The total debits and total credits in the income and income statements columns are not the same before and after the recognition of the net income or net loss Which of the following statement is not correct as to why an entity must make adjusting entries? A. To prepare reliable income statement and statement of financial position B. To ensure that the revenue recognitionand expense recognition principles are followed C. To prepare for closing and reversing entries D. To account for accruals and deferrals Which of the following is NOT a possible post-closing trial balance item? Drawing Retained earnings Accumulated depreciation Capital Which of the following statements relating to analysis of business documents or transactions is/are CORRECT? The accountant determines the impact of the transactions on the financial position. Financial position is represented by the equation “assets equal liabilities plus equity” Statement II only Statement I only Neither statements I nor Statement II Both Statement I and II

ANSWER THE FOLLOWING Complete the statement: closing entries A. Reflect the net income for the accounting period B. Are also posted in the subsidiary ledgers C. Involve all ledger accounts D. Are recorded in the special journals Every adjusting entry affects A. Both a real and a nominal account B. Only nominal accounts C. Only real accounts D. Neither real or nominal accounts Financial statements must be prepared at least A. Every two years B. Annually C. Quarterly D. Semi-annually In the accounting process, financial statements must be prepared _ A. After the adjusting entries have been made B. Before the adjusting entries are made C. After preparing the post-closing trial balance D. After the adjusting and closing entries The following state ments pertain to a trial balance 1. It is prepared at the end of every accounting period after all the transactions for the period have been recorded and posted to the general ledger. 2. It provides evidence that the total debits in the general ledger equal total credits 3. It is a control device that helps eliminate accounting errors Which of the above statements is/are correct? A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 1, 2 and 3 The following pertains to financial statements 1. They are the means by which the information accumulated and processed in financial accounting is periodically communicated to the users 2. They are a structured financial representation of the financial position and financial performance of an entity Which of the above statement is/are correct? Statement 1 only B. Both statements 1 and 2 C. Statement 2 only D. Neither statement 1 nor statement 2 The purpose of the worksheet is to ________ A. Facilitate the preparation of financial statements B. Showcase the capability of accountants C. Generate additional reports to management D. Have a place for journal entries Which of the following statement is correct relative to posting with use of special journals? A. The general ledger posting has to be ahead of subsidiary legder posting. B. The subsidiary ledger posting has to be ahead of general legder posting. C. The general ledger has to be coincide with the subsidiary ledger posting D. No subsidiary ledger posting is necessary Which of the following statement is correct relative to trial balance? A. The trial balance usually contains the account balances that should appear in the financial statements B. The trial balance proves that no errors have been made C. The trial balance provides information that is helpful when making adjusting entries. D. The trial balance is a summary taken directly from the genral journal Which of the following statement is not correct? A. The post reference/folio column serves as cross reference between the journal and the ledger B. The post reference/folio column of the affected account in the ledger contains the journal and journal page number from where the posting was taken C. The cross referencing in the post reference/folio column is done even before posting D. The post reference/folio column of the affected account in the journals contains the account number of the ledger account from where the entry was posted Which statement about the worksheet is not correct? A. Resulting net income or net loss is reflected in the worksheet B. The difference betwwen the total debits and total credits in the income statement column has to be the same as the difference between the total debits and total credits in the balance sheet columns C. The adjusting entries are entered in the worksheet D. The total debits and total credits in the income and income statements columns are not the same before and after the recognition of the net income or net loss Which of the following statement is not correct as to why an entity must make adjusting entries? A. To prepare reliable income statement and statement of financial position B. To ensure that the revenue recognitionand expense recognition principles are followed C. To prepare for closing and reversing entries D. To account for accruals and deferrals Which of the following is NOT a possible post-closing trial balance item? Drawing Retained earnings Accumulated depreciation Capital Which of the following statements relating to analysis of business documents or transactions is/are CORRECT? The accountant determines the impact of the transactions on the financial position. Financial position is represented by the equation “assets equal liabilities plus equity” Statement II only Statement I only Neither statements I nor Statement II Both Statement I and II

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ANSWER THE FOLLOWING

Complete the statement: closing entries ________
A. Reflect the net income for the accounting period
B. Are also posted in the subsidiary ledgers
C. Involve all ledger accounts
D. Are recorded in the special journals

Every adjusting entry affects ____________
A. Both a real and a nominal account
B. Only nominal accounts
C. Only real accounts
D. Neither real or nominal accounts

Financial statements must be prepared at least ________
A. Every two years
B. Annually
C. Quarterly
D. Semi-annually
In the accounting process, financial statements must be prepared _________
A. After the adjusting entries have been made
B. Before the adjusting entries are made
C. After preparing the post-closing trial balance
D. After the adjusting and closing entries
The following state ments pertain to a trial balance
1. It is prepared at the end of every accounting period after all the transactions for the period have been recorded and posted to the general ledger.
2. It provides evidence that the total debits in the general ledger equal total credits
3. It is a control device that helps eliminate accounting errors

Which of the above statements is/are correct?
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3

The following pertains to financial statements
1. They are the means by which the information accumulated and processed in financial accounting is periodically communicated to the users
2. They are a structured financial representation of the financial position and financial performance of an entity

Which of the above statement is/are correct?

Statement 1 only
B. Both statements 1 and 2
C. Statement 2 only
D. Neither statement 1 nor statement 2
The purpose of the worksheet is to ____________
A. Facilitate the preparation of financial statements
B. Showcase the capability of accountants
C. Generate additional reports to management
D. Have a place for journal entries

Which of the following statement is correct relative to posting with use of special journals?
A. The general ledger posting has to be ahead of subsidiary legder posting.
B. The subsidiary ledger posting has to be ahead of general legder posting.
C. The general ledger has to be coincide with the subsidiary ledger posting
D. No subsidiary ledger posting is necessary

Which of the following statement is correct relative to trial balance?
A. The trial balance usually contains the account balances that should appear in the financial statements
B. The trial balance proves that no errors have been made
C. The trial balance provides information that is helpful when making adjusting entries.
D. The trial balance is a summary taken directly from the genral journal
Which of the following statement is not correct?
A. The post reference/folio column serves as cross reference between the journal and the ledger
B. The post reference/folio column of the affected account in the ledger contains the journal and journal page number from where the posting was taken
C. The cross referencing in the post reference/folio column is done even before posting
D. The post reference/folio column of the affected account in the journals contains the account number of the ledger account from where the entry was posted

Which statement about the worksheet is not correct?
A. Resulting net income or net loss is reflected in the worksheet
B. The difference betwwen the total debits and total credits in the income statement column has to be the same as the difference between the total debits and total credits in the balance sheet columns
C. The adjusting entries are entered in the worksheet
D. The total debits and total credits in the income and income statements columns are not the same before and after the recognition of the net income or net loss

Which of the following statement is not correct as to why an entity must make adjusting entries?
A. To prepare reliable income statement and statement of financial position
B. To ensure that the revenue recognitionand expense recognition principles are followed
C. To prepare for closing and reversing entries
D. To account for accruals and deferrals

Which of the following is NOT a possible post-closing trial balance item?
Drawing
Retained earnings
Accumulated depreciation
Capital

Which of the following statements relating to analysis of business documents or transactions is/are CORRECT?

The accountant determines the impact of the transactions on the financial position.
Financial position is represented by the equation “assets equal liabilities plus equity”

Statement II only
Statement I only
Neither statements I nor Statement II
Both Statement I and II

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