Question : 71. Which of the following the usual final step in the : 1256828

 

 

71. Which of the following is the usual final step in the accounting cycle? 

A. Journalizing transactions.

B. Preparing an adjusted trial balance.

C. Preparing a post-closing trial balance.

D. Preparing the financial statements.

E. Preparing a work sheet.

 

72. Each letter below contains three of the steps found in the accounting cycle. Which presents the given steps in the proper sequence, first to last? 

A. Adjust, analyze transactions, close.

B. Analyze transactions, adjust, close.

C. Prepare post-closing trial balance, prepare statements, close.

D. Prepare statements, post, close.

E. Prepare adjusted trial balance, journalize, close.

 

73. A classified balance sheet: 

A. Measures a company’s ability to pay its bills on time.

B. Organizes assets and liabilities into important subgroups.

C. Presents revenues, expenses, and net income.

D. Reports operating, investing, and financing activities.

E. Reports the effect of profit and dividends on retained earnings.

 

 

74. The asset section of a classified balance sheet usually includes: 

A. Current assets, investments, plant assets, and intangible assets.

B. Current assets, long-term assets, revenues, and intangible assets.

C. Current assets, investments, plant assets, and equity.

D. Current liabilities, investments, plant assets, and intangible assets.

E. Current assets, liabilities, plant assets, and intangible assets.

 

 

75. What is the difference between GAAP and IFRS presentations of the current assets section on the balance sheet?

A. Under IFRS it is mandatory to present current assets first while under GAAP it is customary (but not required) to present noncurrent assets first.

B. Both IFRS and GAAP require that current assets are listed first.

C. Under GAAP it is mandatory to present current assets first, while under IFRS it is customary (but not required) to present noncurrent assets first.

D. It is customary (but not required) under both IFRS and GAAP to present noncurrent assets first.

E. GAAP requires that current assets be presented first, while IFRS requires that current assets be presented last.

 

 

76. IFRS tends to be more principles-based compared withGAAP, which is viewed as more rules-based.  Which of the following is a true statement about a principles-based system?

A. A principles-based system eliminates the need for internal controls.

B. A principles-based system is significantly weaker than a rules-based system.

C. A principles-based system will eliminate all fraud.

D. A principles-based system is a way to calculate interest receivable or payable.

E. A principles-based system depends heavily on control procedures to reduce the potential for fraud or misconduct.

 

 

77. Due to an oversight, a company made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31. This oversight would: 

A. Understate net income by $24,000.

B. Overstate net income by $24,000.

C. Have no effect on net income.

D. Overstate assets by $24,000.

E. Understate assets by $24,000.

 

 

78. If a company forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show: 

A. Assets overstated and equity understated.

B. Assets and equity both understated.

C. Assets overstated, net income understated, and equity overstated.

D. Assets, net income, and equity understated.

E. Assets, net income, and equity overstated.

 

79. If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account, there would be: 

A. An overstatement of net income.

B. An overstatement of assets.

C. An overstatement of liabilities.

D. An overstatement of equity.

E. An understatement of liabilities.

 

 

80. A company records the fees for legal services paid in advance by its clients in an account called Unearned Legal Fees. If the company fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned, one effect will be: 

A. An overstatement of equity.

B. An understatement of equity.

C. An understatement of assets.

D. An understatement of liabilities.

E. An overstatement of assets.