Accounting Chapter 4 Questions And Answers – Flashcards
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Accumulated Depreciation appears on the
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balance sheet in the property, plant, and equipment section
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Notes receivable due in 390 days appear on the
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balance sheet in the noncurrent assets section
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Unearned Fees appear on the
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balance sheet as a current liability
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Which one of the fixed asset accounts listed below will not have a related contra asset account?
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Land
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Prepaid insurance is reported on the balance sheet as a
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current asset
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The first item appearing on the statement of retained earnings is
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the beginning balance of retained earnings
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The statement of owner's equity should be prepared
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after the income statement and before the balance sheet
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The income statement should be prepared
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before the statement of owner's equity and balance sheet
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The balance sheet should be prepared
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after the income statement and the statement of owner's equity
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The statement of owner's equity begins with the beginning balance followed by
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adding investments plus net income less withdrawals
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The income statement will present
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revenues less expenses (ordered largest to smallest amount) with miscellaneous expense listed last
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Balance sheet accounts
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are called real accounts
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On which financial statement will Income Summary be shown?
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no financial statement
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After posting the second closing entry to the income summary account, the balance will be equal to
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the net income or net loss for the period
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There are four closing entries. The first one is to close revenues, the second one is to close expenses, the third one is to close ____, and the last one is to close the ____.
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Income Summary, drawing account
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Which of the following accounts ordinarily appears in the post-closing trial balance?
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Unearned Rent
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Diane's Designs purchased a one-year liability insurance policy on March 1 of this year for $8,400 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Diane's first month of operations on March 31?
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$700
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Of the following steps of the accounting cycle, which step should be completed first?
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Transactions are posted to the ledger.
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The accounting cycle requires three trial balances be done. In what order should they be prepared?
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unadjusted, adjusted, post-closing
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A fiscal year for a business
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ordinarily begins on the first day of a month and ends on the last day of the following twelfth month
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During the end-of-period processing, which of the following best describes the logical order of steps?
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preparation of adjustments, adjusted trial balance, financial statements
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In the accounting cycle, the last step is
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preparing a post-closing trial balance
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Which of the following accounts will be closed to the capital account at the end of the fiscal year
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Income Summary
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The natural business year is a
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fiscal year that ends when business activities are at their lowest point
