2024 – 1 A correcting entry A is another name for a closing entry B

1. A correcting entry

A). is another name for a closing entry.

B). may involve any combination of accounts.

C). is a required step in the accounting cycle.

D). must involve one balance sheet account and one income statement account

2. A double rule applied to accounts in the ledger during the closing process implies that

A). the account balance is not zero.

B). a mistake has been made, since double ruling is prescribed.

C). the account is a temporary account.

D). the account is a balance sheet account

3. The first required step in the accounting cycle is

A). posting transactions.

B). reversing entries.

C). journalizing transactions in the book of original entry.

D). analyzing transactions.

4. Which of the following steps in the accounting cycle would not generally be performed daily?

A). Analyze business transactions.

B). Prepare adjusting entries.

C). Journalize transactions.

D). Post to ledger accounts

5. All of the following statements about the post-closing trial balance are correct except it

A). contains only permanent accounts.

B). shows that the accounting equation is in balance.

C). provides evidence that the journalizing and posting of closing entries have been properly completed.

D). proves that all transactions have been recorded

6. IFRS requires the use of

A). neither balance sheet nor statement of financial position, but recommends use of the term balance sheet.

B). the term statement of financial position.

C). neither balance sheet nor statement of financial position, but recommends use of the term statement of financial position.

D). the term balance sheet.

7. Under IFRS and under GAAP, current assets are listed in

IFRS GAAP

A). reverse order of liquidity reverse order of liquidity

B). reverse order of liquidity order of liquidity

C). order of liquidity reverse order of liquidity

D). order of liquidity order of liquidity

8. Post-closing trial balance should be prepared

A). after closing entries are posted to the ledger accounts.

B). before adjusting entries are posted to the ledger accounts.

C). before closing entries are posted to the ledger accounts.

D). only if an error in the accounts is detected

9). In preparing closing entries

A). each expense account will be credited.

B). each revenue account will be credited.

C). the dividends account will be debited.

D). the dividends account will be debited if there is net income for the period

10. Intangible assets are

A). listed as a long-term investment on the balance sheet.

B). listed under current assets on the balance sheet.

C). not listed on the balance sheet because they do not have physical substance.

D). long-lived assets that are often very valuable

11. Correcting entries are made

A). after closing entries.

B). at the beginning of an accounting period.

C). at the end of an accounting period.

D). whenever an error is discovered

12. Income Summary has a credit balance of $17,000 after closing revenues and expenses. The entry to close Income Summary is

A). credit Income Summary $17,000, debit Retained Earnings $17,000.

B). debit Income Summary $17,000, credit Dividends $17,000.

C). credit Income Summary $17,000, debit Dividends $17,000.

D). debit Income Summary $17,000, credit Retained Earnings $17,000

13. IFRS

A). requires a specific format for the balance sheet (statement of financial position) that is identical to U.S. GAAP.

B). requires a specific format for the balance sheet (statement of financial position) that is different from U.S. GAAP.

C). requires no specific format for the balance sheet (statement of financial position) but most companies that follow IFRS prepare the statement in a different format from U.S. GAAP.

D). requires no specific format for the balance sheet (statement of financial position) but most companies that follow IFRS prepare the statement identical to U.S. GAAP.

14. Each of the following accounts is closed to Income Summary except

A). All of these are closed to Income Summary.

B). Expenses.

C). Dividends.

D). Revenue

15. The account, Supplies, will appear in the following debit columns of the worksheet.

A). Trial balance.

B). Adjusted trial balance.

C). Balance

 

D). All of the above