BUS103: Introduction to Financial Accounting

True-false

Indicate whether each of the following statements is true or false.

1. At the end of the accounting period, three trial balances are prepared.
   
2. The amounts in the Adjustments columns are always added to the amounts in the Trial Balance columns to determine the amounts in the Adjusted Trial Balance columns.
   
3. If a net loss occurs, it appears in the Income Statement credit column and Statement of Retained Earnings debit column.
   
4. After the closing process is complete, no balance can exist in any revenue, expense, Dividends, or Income Summary account.
   
5. The post-closing trial balance may contain revenue and expense accounts.
   
6. All accounting systems currently in use are computerized.
   
   

Multiple-choice

Select the best answer for each of the following questions.

1. Which of the following accounts is least likely to be adjusted on the work sheet?

a. Supplies on Hand.

b. Land.

c. Prepaid Rent.

d. Unearned Delivery Fees.

2. If the Balance Sheet columns do not balance, the error is most likely to exist in the:

a. General journal.

b. General ledger.

c. Last six columns of the work sheet.

d. First six columns of the work sheet.

3. Net income for a period appears in all but which one of the following?

a. Income Statement debit column of the work sheet.

b. Statement of Retained Earnings credit column of the work sheet.

c. Statement of retained earnings.

d. Balance sheet.

4. Which of the following statements is false regarding the closing process?

a. The Dividends account is closed to Income Summary.

b. The closing of expense accounts results in a debit to Income Summary.

c. The closing of revenues results in a credit to Income Summary.

d. The Income Summary account is closed to the Retained Earnings account.

5. Which of the following statements is true regarding the classified balance sheet?

a. Current assets include cash, accounts receivable, and equipment.

b. Plant, property, and equipment is one category of long-term assets.

c. Current liabilities include accounts payable, salaries payable, and notes receivable.

d. Stockholders' equity is subdivided into current and long-term categories.