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IFRS requires the use of


A) the term balance sheet.
B) the term statement of financial position.
C) neither balance sheet nor statement of financial position, but recommends use of the term balance sheet.
D) neither balance sheet nor statement of financial position, but recommends use of the term statement of financial position.

E) A) and D)
F) A) and C)

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After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

A) True
B) False

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After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to


A) the beginning retained earnings reported on the retained earnings statement.
B) the amount of the retained earnings reported on the balance sheet.
C) zero.
D) the net income for the period.

E) C) and D)
F) None of the above

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Correcting entries


A) always affect at least one balance sheet account and one income statement account.
B) affect income statement accounts only.
C) affect balance sheet accounts only.
D) may involve any combination of accounts in need of correction.

E) C) and D)
F) B) and D)

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Current assets are listed in the order of liquidity.

A) True
B) False

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The use of fair value to report assets


A) is not allowed under GAAP or IFRS.
B) is required by GAAP and IFRS.
C) is increasing under GAAP and IFRS, but GAAP has adopted it more broadly.
D) is increasing under GAAP and IFRS, but IFRS has adopted it more broadly.

E) B) and D)
F) C) and D)

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Cash and supplies are both classified as current assets.

A) True
B) False

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Under IFRS


A) comparative prior-period information must be presented, but financial statements need not be provided annually.
B) comparative prior-period informaton must be presented, and financial statements must be provided annually.
C) comparative prior-period information is not required, and financial statements need not be provided annually.
D) comparative prior-period information is not required, but financial statements must be provided annually.

E) None of the above
F) A) and B)

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Adjusting entries are prepared from


A) source documents.
B) the adjustments columns of the worksheet.
C) the general ledger.
D) last year's worksheet.

E) B) and D)
F) A) and C)

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The steps in the preparation of a worksheet do not include


A) analyzing documentary evidence.
B) preparing a trial balance on the worksheet.
C) entering the adjustments in the adjustment columns.
D) entering adjusted balances in the adjusted trial balance columns.

E) B) and C)
F) A) and D)

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If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income.

A) True
B) False

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A current asset is


A) the last asset purchased by a business.
B) an asset which is currently being used to produce a product or service.
C) usually found as a separate classification in the income statement.
D) an asset that a company expects to convert to cash or use up within one year.

E) All of the above
F) C) and D)

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Which of the following is a true statement about closing the books of a corporation?


A) Expenses are closed to the Expense Summary account.
B) Only revenues are closed to the Income Summary account.
C) Revenues and expenses are closed to the Income Summary account.
D) Revenues, expenses, and the dividends account are closed to the Income Summary account.

E) A) and C)
F) A) and D)

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On May 25, Yellow House Company received a $650 check from Grizzly Bean for services to be performed in the future. The bookkeeper for Yellow House Company incorrectly debited Cash for $650 and credited Accounts Receivable for $650. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:


A) debit Cash $650 and credit Unearned Service Revenue $650.
B) debit Accounts Receivable $650 and credit Service Revenue $650.
C) debit Accounts Receivable $650 and credit Cash $650.
D) debit Accounts Receivable $650 and credit Unearned Service Revenue $650.

E) B) and C)
F) All of the above

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A post-closing trial balance should be prepared


A) before closing entries are posted to the ledger accounts.
B) after closing entries are posted to the ledger accounts.
C) before adjusting entries are posted to the ledger accounts.
D) only if an error in the accounts is detected.

E) All of the above
F) B) and D)

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Closing entries are necessary for


A) permanent accounts only.
B) temporary accounts only.
C) both permanent and temporary accounts.
D) permanent or real accounts only.

E) B) and D)
F) B) and C)

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The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: What are total long-term liabilities at December 31, 2015? A) $0 B) $70,000 C) $88,000 D) $90,000 The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: What are total long-term liabilities at December 31, 2015? A) $0 B) $70,000 C) $88,000 D) $90,000 What are total long-term liabilities at December 31, 2015?


A) $0
B) $70,000
C) $88,000
D) $90,000

E) A) and D)
F) A) and C)

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The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: The entry to close the expense accounts includes a A) debit to Income Summary for $1,300. B) credit to Rent Expense for $1,500. C) credit to Income Summary for $5,700. D) debit to Salaries and Wages Expense for $3,000. The entry to close the expense accounts includes a


A) debit to Income Summary for $1,300.
B) credit to Rent Expense for $1,500.
C) credit to Income Summary for $5,700.
D) debit to Salaries and Wages Expense for $3,000.

E) None of the above
F) All of the above

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A correcting entry


A) must involve one balance sheet account and one income statement account.
B) is another name for a closing entry.
C) may involve any combination of accounts.
D) is a required step in the accounting cycle.

E) None of the above
F) A) and B)

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Each of the following accounts is closed to Income Summary except


A) Expenses.
B) Dividends.
C) Revenues.
D) All of these are closed to Income Summary.

E) A) and C)
F) None of the above

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