Horngren's Financial and Managerial Accounting, 6e (Miller-Nobles)

) The balance sheet is the first financial statement that is prepared at the end of the period. Answer: FALSE 2) The statement of retained earnings shows how retained earnings changed during the period due to acquiring assets and paying liabilities. Answer: FALSE 3) In a balance sheet, prepared under IFRS guidelines, cash is often shown as one of the last assets listed. Answer: TRUE 4) Assets and liabilities are presented in a different order on a balance sheet prepared following IFRS than on a balance sheet prepared following U.S. GAAP. Answer: TRUE 5) Revenue may be called Profit and Net Income may be called Turnover in an income statement prepared under IFRS. Answer: FALSE 6) Which of the following is NOT a balance sheet account? A) Unearned Revenue B) Prepaid Rent C) Accumulated Depreciation - Building D) Dividends Answer: D 7) Which financial statement is prepared last? A) income statement B) balance sheet C) statement of retained earnings D) The financial statements can be prepared in any order. Answer: B 8) The financial statement that reports assets, liabilities, and stockholders' equity as of the last day of the period is called the ________. A) income statement B) statement of retained earnings C) balance sheet D) unadjusted trial balance Answer: C 9) List the order in which the balance sheet, statement of retained earnings, and income statement are prepared. Briefly discuss why this order is necessary. Answer: The order in which these statements are prepared is income statement, statement of retained earnings, and balance sheet. The income statement is prepared first because net income is needed for the statement of retained earnings. The balance sheet is prepared last because this statement needs the ending balance of retained earnings. 10) In a balance sheet, assets are classified as either current or long term, depending on their liquidity. Answer: TRUE 11) Prepaid Rent is always classified as a long-term asset. Answer: FALSE 12) The operating cycle is the time span required for a business to repay its long-term liabilities. Answer: FALSE 13) A balance sheet prepared in the account form lists the assets at the top and the liabilities and stockholders' equity below. Answer: FALSE 14) A balance sheet prepared in the report form lists the assets on the left and the liabilities and stockholders' equity on the right. Answer: FALSE 15) A classified balance sheet can be presented in either a report or an account form. Although either is acceptable, the report form is more popular. Answer: TRUE 16) A net loss from the balance sheet decreases Retained Earnings. Answer: FALSE 17) Liquidity is a measure of how quickly an item can be converted to net income. Answer: FALSE 18) In a classified balance sheet, assets are reported in the order of liquidity and liabilities are listed in the order in which they must be paid. Answer: TRUE 19) Intangible assets are long-term assets that have no physical form and convey special rights. Answer: TRUE 20) The financial statements are prepared from the ________. A) adjusted trial balance B) chart of accounts C) statement of retained earnings D) unadjusted trial balance Answer: A