WorksheetsAdv Accounting - Chapter 22 Quiz/Review
Total questions: 30
Worksheet time: 20mins
Name
Class
Date
1.
If a company has a net income, the entry to close the Income Summary account includes a debit to Income Summary.
a)
True
b)
False
2.
Paying cash for inventory is an example of an operating activity.
a)
True
b)
False
3.
Retained Earnings represents previous years’ earnings that have been distributed to stockholders.
a)
True
b)
False
4.
The unadjusted trial balance and other financial data are used to plan and record adjusting entries.
a)
True
b)
False
5.
The issuance of bonds payable is an example of an investing activity.
a)
True
b)
False
6.
If a company does not use reversing entries, the last step in its accounting cycle is to prepare a post-closing trial balance.
a)
True
b)
False
7.
Cash paid for utilities would be listed as a cash outflow in the Investing Activities section on a statement of cash flows.
a)
True
b)
False
8.
The statement of cash flows is prepared using the accrual basis of accounting.
a)
True
b)
False
9.
The purchase of store equipment for cash would be listed as a cash outflow in the Investing Activities section on a statement of cash flows.
a)
True
b)
False
10.
The net income of a corporation increases retained earnings.
a)
True
b)
False
11.
The adjusted trial balance is used to prepare financial statements.
a)
True
b)
False
12.
Receiving cash from interest income is an example of an operating activity.
a)
True
b)
False
13.
Paying the principal on a line of credit would be listed as a cash inflow in the Financing Activities section on a statement of cash flows.
a)
True
b)
False
14.
If a company uses reversing entries, a reversing entry should be made for every adjusting entry that created a balance in an asset or a liability account.
a)
True
b)
False
15.
Receiving cash from the sale of equipment is an example of an investing activity.
a)
True
b)
False
16.
Paying cash dividends is an example of a financing activity.
a)
True
b)
False
17.
Paying cash for office equipment is an example of a financing activity
a)
True
b)
False
18.
The closing entry for the Loss on Plant Assets account includes a debit to
a)
Retained Earnings
b)
Income Summary.
c)
Loss on Plant Assets
d)
Gain on Plant Assets
19.
An amount earned by a corporation and not yet distributed to stockholders is
a)
retained earnings
b)
net income
c)
capital stock
d)
stockholders’ equity.
20.
An asset account that would not be included in current assets is
a)
Merchandise Inventory.
b)
Prepaid Insurance
c)
Store Equipment.
d)
Supplies.
21.
A corporation’s total stockholders’ equity is increased by
a)
net income.
b)
declaring dividends
c)
paying dividends.
d)
receiving payment on account.
22.
All of the following accounts would appear in the Other Expenses section of an income statement except
a)
Interest Expense
b)
Utilities Expense.
c)
Loss on Plant Assets
d)
none of these.
23.
Paid-in Capital in Excess of Par—Common appears on the
a)
balance sheet and statement of cash flows.
b)
income statement and statement of stockholders’ equity.
c)
statement of stockholders’ equity and balance sheet.
d)
income statement and statement of cash flows.
24.
The reversing entry for accrued interest expense would include a debit to
a)
Income Summary.
b)
Interest Expense.
c)
Interest Income.
d)
Interest Payable
25.
The closing entry for the Dividends account includes a credit to
a)
Retained Earnings.
b)
Dividends.
c)
Income Summary.
d)
Capital Stock—Common.
26.
The reversing entry for accrued interest income would include a debit to
a)
Income Summary
b)
Interest Expense.
c)
Interest Income.
d)
Interest Receivable.
27.
If Merchandise Inventory decreases from the beginning to the end of the fiscal period, the adjusting entry includes a debit to Income Summary.
a)
True
b)
False
28.
If Merchandise Inventory increases from the beginning to the end of the fiscal period, the adjusting entry includes a credit to Merchandise Inventory.
a)
True
b)
False
29.
Dividends decrease the earnings retained by a corporation.
a)
True
b)
False
30.
All of the following accounts would appear in the Other Revenue section of an income statement except
a)
Interest Income
b)
Rent Income.
c)
Gain on Plant Assets.
d)
Sales.
100 %
