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The income statement and statement of financial position columns 1. If the total debits exceed total credits in the statement of financial position columns of the worksheet, equity a. will increase because net income has occurred. b. will decrease because a net loss has occurred. c. is in error because a mistake has occurred. d. will not be affected. 2 The income statement and statement of financial positions columns of Reed Com ...

Other / Other 31 Mar 2016

Current assets are listed in the reverse order of liquidity 1. In one closing entry, the Dividends account is credited and Income Summary is debited. 2. The post-closing trial balance will contain only statement of equity accounts and statement of financial position accounts. 3. The operating cycle of a company is the average time required to collect the receivables resulting from producing revenues. 4. Current assets are ...

Other / Other 31 Mar 2016

The operating cycle of a company is determined by the number of years 1. Long-term investments would appear in the property, plant, and equipment section of the statement of financial position. 2. A liability is classified as a current liability if the company is to pay it within the forthcoming year. 3. A company's liquidity is concerned with the relationship between long-term investments and long-term debt. 4. Intangi ...

Other / Other 31 Mar 2016

The Statement of Financial Position credit column Use the following data, taken from the adjusted trial balance, for 1 and 2. Debit Credit Cash € 3,712 Accounts Receivable 3,904 Supplies 480 Accounts Payable € 1,792 Unearned Revenue 160 Share Capital-ordinary 5,000 Retained Earning 760 Dividends 300 Service Revenue 4,064 Salaries Expense 1,344 Miscellaneous Expense 256 Supplies Expense 2,228 ...

Other / Other 31 Mar 2016

Closing entries are journalized and posted 1. The income summary account a. is a permanent account. b. appears on the statement of financial position. c. appears on the income statement. d. is a temporary account. 2. If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a a. debit to Retained Earnings. b. debit to Dividends c. credit to Ret ...

Other / Other 31 Mar 2016

IFRS requires that current asset be reported in the order 1. Current assets are the first category of assets reported on the Statement of Financial Position. 2. IFRS permits the noncurrent classifications to be reported before the current classifications on the Statement of Financial Position 3. IFRS requires that current asset be reported in the order of their liquidity. 4. A company's operating cycle and fiscal year are usu ...

Other / Other 31 Mar 2016

A worksheet is a multiple column form that facilitates 1. A worksheet is a multiple column form that facilitates the a. identification of events. b. measurement process. c. preparation of financial statements. d. analysis process. 2. Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process? a. Large company with numerous accounts b. Small company with numerous accounts c. A ...

Other / Other 31 Mar 2016

Reversing entries are an optional book keeping procedure 1. Reversing entries are an optional book keeping procedure. 2. Reversing entries will always affect Statement of Financial Position accounts. 3. The use of reversing entries will change the amounts reported in the Statement of Financial Position. 4. After a worksheet has been completed, the statement columns contain all data that are required for the preparation of fin ...

Other / Other 31 Mar 2016

A business entity has only one accounting cycle 1. A business entity has only one accounting cycle over its economic existence. 2. Both correcting entries and adjusting entries always affect at least one statement of financial position account and one income statement account. 3. Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period. 4. An incorrect debit to ...

Other / Other 31 Mar 2016

The Income Summary account is an important account 1. The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts. 2. An error has occurred in the closing entry process if a. revenue and expense accounts have zero balances. b. the retained earnings account is credited for the amount of net income. c. the dividends ...

Other / Other 31 Mar 2016