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Exam 4: Completing the Accounting Cycle

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Question 71

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Assets that are expected to be converted to cash,sold,or used up during the next 12 months,or within the business's normal operating cycle if the cycle is longer than a year,are called ________ assets.

A) intangible
B) plant
C) long-term
D) current

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Question 72

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The Cash account is a temporary account.

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Question 73

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Which of the following statements is an accurate interpretation of the current ratio?

The current ratio shows the profitability of a firm.

Which financial statement is prepared last?

Which of the following is a current asset that is expected to be converted to cash,sold,or consumed during the next year (or the normal operating cycle,if longer) ?

The worksheet helps accountants to ________.

The financial statements are prepared from the ________.

Which of the following accounts will be closed by debiting the Income Summary account?

The Accounts Receivable account is a permanent account.

The Martinez,Capital account is a permanent account.

The following contains information from the records of Bourne Engineers and Architects. $\begin{array} { c } \text { Bourne Engineers and Architects } \\\text { Selected Finarncial Information } \\\text { Decermber 31, 2019 }\\\begin{array} {| l | r| } \hline \text { Current Assets } & \$ 70,000 \\\hline \text { Current Liabilities } & 35,000 \\\hline \text { Long-Term Assets } & 97,000\\\hline \text { Long-Term Liabilities } & 63,000\\\hline \text { Total Revenues } & 55,000 \\\hline \text { Total Expenses } & 36,000\\\hline\end{array}\end{array}$ Calculate the current ratio.(Round your answer to two decimal places.)

Which of the following is NOT a balance sheet account?

The following information is provided for Journey Company and Mastery Company.Both companies provide training materials for electricians. $\begin{array} { | l | c | c | } \hline \text { Company } & 2018 & 2019 \\\hline \text { Tourney Company's Current Ratio } & 1.8 & 1.2 \\\hline \text { Mastery Company's Current Ratio } & .8 & 1.4 \\\hline\end{array}$ a.Which company has the stronger current ratio for 2018 and 2019? Defend your answer. b.Discuss the change in current ratio for each company.

Prepaid Rent in the worksheet's unadjusted trial balance column is $6,000.Prepaid Rent in the balance sheet column is $4,000.Which of the following entries would have caused this difference?

Which of the following entries will be necessary to close the Insurance Expense account at the end of the year?

The current ratio is calculated using the values from the income statement.

The following is the adjusted trial balance as of December 31,2018 of Bravo Photography: $\begin{array}{|l|r|r|r|}\hline\text { Account }&\text { Debit } & \text { Credit }\\\hline \text { Cash } & \$ 1,700& \\\hline \text { Accounts Receivable } & 8,500 & \\\hline \text { Supplies } & 100 & \\\hline \text { Equipment } & 7,500 \\\hline \text { Accumulated Depreciation-Equipment } & &\$2,000\\\hline \text { Accounts Payable } & &1,200 \\\hline \text { Salaries Payable } & & 800 \\\hline \text { Unearned Revenue } & &600 \\\hline \text { Bravo, Capital } &&3,400 \\\hline \text { Bravo, Withdrawals } & 2,300& \\\hline \text { Service Revenue } & &40,000 \\\hline \text { Salaries Expense } &24,000 & \\\hline \text { Supplies Expense } &2,300\\\hline \text { Depreciation Expense-Equipment } &1,600 \\\hline \text {Total}& \$ 48,000 & \$ 48,000 \\\hline\end{array}$ Provide the closing entry for revenues.Omit explanation.

The Service Revenue account is a temporary account.

Prepaid Rent is always classified as a long-term asset.