KY Accounting Review Part 2 of 2

Which of the following can be converted to cash within one year:

• Mortgage payable
• Current assets
• Current equities
• Plant and equipment

Prepaid expenses such as prepaid insurance are reported as__________ on the balance sheet.

• liabilities
• assets
• equity
• income

Which of the following is the balance of the Accounts Receivable account adjusted for receivables that may be uncollectible as well as for sales returns and allowances:

• Net cost of inventory purchases
• Net income from business operations
• Net realizable value of accounts receivable
• Owner’s equity from contributed capital

What account represents money that a business owes for merchandise, services, or materials that it has received but has not paid for?

• Prepaid insurance
• Petty cash
• Accounts receivable
• Accounts payable

Which of the following are the salaries that a business owes to its employees:

• Wages payable
• Wages receivable
• Notes payable
• Notes receivable

The Retained Earnings account is a component of the __________ section of the balance sheet.

• Assets
• Liabilities
• Retained Earnings
• Shareholder’s Equity 

On a statement of cash flows, cash received from retail customers would be listed in the section for cash flows from __________ activities.

• investing
• financing
• expense
• operating

Last month, the Mom’s Home Cooking Company paid out $14,665 in dividends. The cash that the company distributed as dividends should be listed in which section of the statement of cash flows?

• Cash flows from operating activities
• Cash flows from investing activities
• Cash flows from financing activities
• Cash flows from expense activities

The change in cash on the statement of cash flows plus the cash at the beginning of the period, also found on the statement of cash flows, is equal to __________ on the balance sheet.

• cash
• owner’s equity
• liabilities
• assets

Which of the following is a purpose of closing entries:

• Clearing the general ledger for the next accounting period
• Accounting for depreciation of plant and equipment
• Analyzing source documents and entering transactions
• Preparing the trial balance for the next accounting period