Chapter 4 Practice Materials.docVIP

Chapter 4—Completing the Accounting Cycle MULTIPLE CHOICE 1. In the accounting cycle, the last step is a. preparing the financial statements b. journalizing and posting the adjusting entries c. preparing a post-closing trial balance d. journalizing and posting the closing entries ANS: C DIF: Moderate OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 2. During the end-of-period processing which of the following best describes the logical order of this process a. Preparation of adjustments, adjusted trial balance, financial statements b. Preparation of Income Statement, adjusted trial balance, Balance Sheet c. Preparation of adjusted trial balance, cross-referencing, journalizing d. Preparation of adjustments, adjusted trial balance, posting ANS: A DIF: Difficult OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 3. What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance? a. The Adjusted Trial Balance will show the net income (loss) as an additional account. b. Both will need to be in balance in order to continue with the end-of-period processing c. The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts. d. The Unadjusted Trial Balance will be used to record the adjustments for the period. ANS: C DIF: Difficult OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 4. Once the adjusting entries are posted, the Adjusted Trial Balance will prepared to a. verify that the debits and credits are in balance. b. verify that all of the adjustments were posted in the correct accounts. c. verify that the net income (loss) is correct for the period. d. verify the correct flow of accounts into the financial statements. ANS: A DIF: Moderate OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 5. When preparing the statement of owners equity, the beginning capital balance can always be found a. in the Income Statement columns of the work sh