CHAPTER 4: COMPLETING THE ACCOUNTING CYCLE
1. Cross-referencing is useful in assuring that the debits and credits are in balance.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-01 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
2. When accounts do not appear on the unadjusted trial balance but are needed to post adjustments, they are
simply added to the account title column.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-01 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
3. Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-01 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 4: Completing the Accounting Cycle
4. There is really no benefit in preparing financial statements in any particular order.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
5. On the income statement, miscellaneous expenses are usually presented as the last item without regard to the
dollar amount.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
6. The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss,
(3) Drawing, (4) Owner's contributions, (5) Ending capital.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 4: Completing the Accounting Cycle
7. The difference between a classified balance sheet and one that is not classified is that the classified one has
subheadings.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
8. Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the
normal operations of a business, usually longer than one year, are called current assets.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.ACBSP.APC.15 - Current Assets Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
9. Prepaid Insurance is an example of a current asset.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.15 - Current Assets Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 4: Completing the Accounting Cycle
10. Land is an example of a plant asset.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.13 - Long-term Assets Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
11. Liabilities that will be due within one year or less and that are to be paid out of current assets are called
current liabilities.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.16 - Current Liabilities Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
12. The amount of the net income for a period appears on both the income statement and the balance sheet for
that period.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1. Cross-referencing is useful in assuring that the debits and credits are in balance.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-01 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
2. When accounts do not appear on the unadjusted trial balance but are needed to post adjustments, they are
simply added to the account title column.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-01 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
3. Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-01 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle
ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 4: Completing the Accounting Cycle
4. There is really no benefit in preparing financial statements in any particular order.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
5. On the income statement, miscellaneous expenses are usually presented as the last item without regard to the
dollar amount.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
6. The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss,
(3) Drawing, (4) Owner's contributions, (5) Ending capital.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 4: Completing the Accounting Cycle
7. The difference between a classified balance sheet and one that is not classified is that the classified one has
subheadings.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
8. Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the
normal operations of a business, usually longer than one year, are called current assets.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.ACBSP.APC.15 - Current Assets Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
9. Prepaid Insurance is an example of a current asset.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.15 - Current Assets Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 4: Completing the Accounting Cycle
10. Land is an example of a plant asset.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.13 - Long-term Assets Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
11. Liabilities that will be due within one year or less and that are to be paid out of current assets are called
current liabilities.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.16 - Current Liabilities Reporting
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
12. The amount of the net income for a period appears on both the income statement and the balance sheet for
that period.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-02 - 04-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
