Chapter 04 – The Accounting Cycle
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Page 31
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-02 – LO: 04–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
Use the adjusted trial balance for Stockton Company below to answer the questions that follow.
Stockton Company
Adjusted Trial Balance
December 31
Cash
7,530
Accounts Receivable
2,100
Prepaid Expenses
700
Equipment
13,700
Accumulated Depreciation
1,100
Accounts Payable
1,900
Notes Payable
4,300
Common Stock
1,000
Retained Earnings
12,940
Dividends
790
Fees Earned
9,250
Wages Expense
2,500
Rent Expense
1,960
Utilities Expense
775
Depreciation Expense
250
Miscellaneous Expense
185
Totals
30,490
30,490
82. Determine the net income (loss) for the period.
a.
net income $9,250
b.
net loss $790
c.
net loss $5,670
d.
net income $3,580
ANSWER:
d
RATIONALE:
Net income = Fees earned – (Wages expense + Rent expense + Utilities expense
+ Depreciation expense + Miscellaneous expense) = $ 9,250 – ($2,500 + $1,960
+ $775 + $250 + $185) = $3,580
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Stockton Company
Chapter 04 – The Accounting Cycle
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Page 34
a.
before the income statement and the retained earnings statement
b.
before the income statement and after the retained earnings statement
c.
after the income statement and the retained earnings statement
d.
after the income statement and before the retained earnings statement
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-02 – LO: 04–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
88. The income statement will present
a.
revenues less expenses (ordered largest to smallest amount) with miscellaneous expense listed last
b.
revenues less expenses (ordered smallest to largest amounts) with miscellaneous expense listed last
c.
revenues less expenses (ordered in alphabetical order)
d.
revenues less expenses (order is not important)
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-02 – LO: 04–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
89. The classified balance sheet will show which asset subsections?
a.
current assets and other equity
b.
current assets and property, plant, and equipment
c.
current liabilities and short-term assets
d.
other revenues and property, plant and equipment
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
Chapter 04 – The Accounting Cycle
Copyright Cengage Learning. Powered by Cognero.
Page 36
a.
added to assets and the two are equal to liabilities
b.
added to liabilities and the two are equal to assets
c.
subtracted from liabilities and the net amount is equal to assets
d.
equal to the total of assets and liabilities
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-02 – LO: 04–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.02 – GAAP
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
93. Balance sheet accounts
a.
represent amounts accumulated during a specific period of time
b.
are called real accounts
c.
have zero balances after the closing entries have been posted
d.
are not affected by adjustments
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-03 – LO: 04–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
94. On which financial statement will Income Summary be shown?
a.
retained earnings statement
b.
balance sheet
c.
income statement
d.
no financial statement
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
Copyright Cengage Learning. Powered by Cognero.
Page 38
97. After posting the second closing entry to the income summary account, the balance will be equal to
a.
zero
b.
stockholders’ equity
c.
revenues for the period
d.
the net income or net loss for the period
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-03 – LO: 04–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.08 – Closing Entries
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
98. What is the first account that should be listed in the post-closing trial balance?
a.
Income Summary
b.
Common Stock
c.
Cash
d.
Fees Earned
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.04-03 – LO: 04–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.08 – Closing Entries
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:18 PM
DATE MODIFIED:
10/16/2017 4:41 PM
99. Which of the following account groups are nominal accounts?
a.
Cash, Dividends, Wages Payable
b.
Prepaid Insurance, Equipment, Fees Earned
c.
Common Stock, Dividends, Income Summary
d.
Rent Revenue, Fees Earned, Miscellaneous Expense
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
