Question

1)Current assets include

a.assets that are expected to serve the business for many years.

b.cash and assets that will be converted into cash or consumed within either one year or the normal operating cycle of the business, whichever is longer.

c.plant assets.

d.cash and assets that will be converted into cash or consumed within either one year or the normal operating cycle of the business, whichever is shorter.

2)A sale made on credit would be reported as an __________.

a.operating activity.

b.investing activity.

c.financing activity.

d.None of these choices are correct

3)The summary account will not appear on the post-closing trial balance.

True

False

4)Numbers in parentheses on a statement of cash flows indicate a cash outflow.

True

False

5)The Service Fees account

a.will appear on the post-closing trial balance.

b.is a temporary revenue account.

c.is closed to the Income Summary account.

d.is closed to the Income Summary account and is a temporary revenue account

6)All of the following are true about the post-closing trial balance, except:

a.Only permanent accounts are listed in the post-closing Trial Balance.

b.It is prepared before the closing process.

c.The owner's capital balance listed on the post-closing Trial Balance was updated to reflect revenues, expenses, and drawing for the accounting period.

d.It is prepared after posting the closing entries to prove the equality of the debit and credit balances in the general ledger accounts.

7)The step(s) of the accounting cycle that is/are utilized during the accounting period would be

a.analyze source documents.

b.post to the general ledger accounts.

c.journalize the transactions.

d.All of these choices are correct.

8)the steps involved in accounting for all of the business activities during an accounting period are called the __________.

operating cycle

calendar cycle.

accounting cycle

None of these choices are correct.

Answer 1

1)Current assets include

Correct Answer: b.cash and assets that will be converted into cash or consumed within either one year or the normal operating cycle of the business, whichever is longer.

These include Cash, Accounts receivables, Inventory, etc, that are realized within normal operating cycle.

2)A sale made on credit would be reported as an __________.

Correct Answer: d.None of these choices are correct

This is because NO CASH IS INVOLVE and hence not shown in Statement of Cash Flows

3)The summary account will not appear on the post-closing trial balance.

True

Because the same gets closed to Retained earnings or Capital account, as the case may be.

4)Numbers in parentheses on a statement of cash flows indicate a cash outflow.

True

These are negative figures indicating that Cash has been paid.

5)The Service Fees account

Correct Answer: d.is closed to the Income Summary account and is a temporary revenue account

This is because it’s a Revenue account and these are closed to Income Summary.

6)All of the following are true about the post-closing trial balance, except:

Correct Answer: b.It is prepared before the closing process.

Because all other statements were absolutely correct.

7)The step(s) of the accounting cycle that is/are utilized during the accounting period would be

Correct Answer: d.All of these choices are correct.
Accounting Cycle involves all of these mentioned options.

8)the steps involved in accounting for all of the business activities during an accounting period are called the __________.

Correct Answer = accounting cycle