Chapter 4

What is the last step in the accounting cycle?

• Prepare the financial statements.

• Prepare the post-closing trial balance.

• Journalize closing entries.

• Prepare the adjusted trial balance.

Which columns of the accounting worksheet show un-adjusted amounts?

• Trial Balance

• Adjustments

• Balance Sheet

• Income Statement

Which of the following accounts may appear on a post-closing trial balance?

• Cash, Service Revenue, and Rent Expense

• Cash, Accounts Receivable, and Rent Revenue

• Cash, Accounts Receivable, and Prepaid Rent

• Cash, Accounts Receivable, and Rent Expense

Which situation indicates a net income within the Income Statement columns of the worksheet?

• Total debits exceed total credits.

• Total debits equal total credits.

• Total credits exceed total debits.

• None of the above are correct.

Christopher’s Closet sells men’s clothing. At the end of the current year, Christopher’s Closet has Rent Expense of $1,500, and Supplies Expense of $829. What closing entry will Christopher’s Closet make for these expense accounts?

• DR Rent expense 1,500 + DR Supplies expense 829 + CR Cash 2,329

• CR Rent expense 1,500 + CR Supplies expense 829 + DR Cash 2,329

• DR Rent expense 1,500 + DR Supplies expense 829 + CR Income Summary 2,329

• CR Rent expense 1,500 + CR Supplies expense 829 + DR Income Summary 2,329

Which of the following accounts is closed at the end of the accounting cycle?

• Cash

• Owner Withdrawals

• Salary Payable

• Accumulated Depreciation

Which of the following statements is true?

• Cash is a nominal account, and Service Revenue is a temporary account.

• Equipment is a real account, and Salary Expense is a permanent account.

• Accounts Receivable is a temporary account, and Owner Withdrawals is a real account.

• Prepaid Rent is a permanent account, and Income Summary is a nominal account.

Which of the following is an appropriate closing entry?

• DR Income Summary + CR Service revenue

• DR Salaries payable + CR Income Summary

• DR Service Revenue + CR Income Summary

• DR Salaries expense + CR Income summary

Which of the following is not a plant asset?

• Office Supplies

• Land

• Equipment

• All of these are plant assets.

Sammy’s Sandwiches has Cash of $400, Accounts Receivable of $1,600, Office Supplies of $800, Supplies Expense of $400, and Service Revenue of $1,800. Sammy’s owes $600 on Accounts Payable, $1,000 on Salaries Payable, and $1,400 on Long-term Notes Payable. What is Sammy’s current ratio (rounded to two decimal places)?

• 3.13

• 1.75

• 1.6

• 0.93