ACC/290T Preparing Financial
Statements Quick Check Questions
and Answers.
Which of the following describes the correct order of how financial statements are prepared
from the information taken from the trial balance? - Answer Identify all revenues and
expenses, Compute net income, Compute the ending retained earnings balance, prepare a
balance sheet
Which of the following sources provides the raw material to prepare the financial statements? -
Answer Adjusted trial balance
When preparing its financial statements, a company is more concerned about which of the
following? - Answer Assets are not understated and liabilities are not overstated
Nominal accounts are found almost exclusively on which of the following financial statements? -
Answer Income statement
Closing entries are: - Answer Required to bring all nominal accounts to a zero balance prior to
starting a new accounting cycle
The entry to close the revenue accounts normally includes a: - Answer Debit to each revenue
account
The dividends account is: - Answer None of these
The dividends account is: - Answer Closed to retained earnings by being credited
A post-closing trial balance does not include the: - Answer Income statement accounts
Which of the following is a true statement about an auditor's evaluation of an accounting
system? - Answer If a company has an efficient and orderly accounting system then the
auditor has greater confidence that the financial statements are reliable.
Statements Quick Check Questions
and Answers.
Which of the following describes the correct order of how financial statements are prepared
from the information taken from the trial balance? - Answer Identify all revenues and
expenses, Compute net income, Compute the ending retained earnings balance, prepare a
balance sheet
Which of the following sources provides the raw material to prepare the financial statements? -
Answer Adjusted trial balance
When preparing its financial statements, a company is more concerned about which of the
following? - Answer Assets are not understated and liabilities are not overstated
Nominal accounts are found almost exclusively on which of the following financial statements? -
Answer Income statement
Closing entries are: - Answer Required to bring all nominal accounts to a zero balance prior to
starting a new accounting cycle
The entry to close the revenue accounts normally includes a: - Answer Debit to each revenue
account
The dividends account is: - Answer None of these
The dividends account is: - Answer Closed to retained earnings by being credited
A post-closing trial balance does not include the: - Answer Income statement accounts
Which of the following is a true statement about an auditor's evaluation of an accounting
system? - Answer If a company has an efficient and orderly accounting system then the
auditor has greater confidence that the financial statements are reliable.
