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Question(s) / Instruction(s):

98. Which of the following liabilities are not related to the operating cycle? a. Wages payable b. Accounts payable c. Utilities payable d. Bonds payable

99. The report form of the balance sheet a. is identical to the account form. b. lists the asset section to the left and the liabilities and owner's equity sections to the right. c. shows assets above liabilities and owner's equity. d. lists assets to the left, liabilities in the middle, and owner's equity to the right.

100. It is not true that current assets are resources that are expected to be a. realized in cash within one year. b. sold within one year. c. consumed within one year. d. acquired within one year.

101. The operating cycle of a company is the average time that is required to go from cash to a. sales in producing revenues. b. cash in producing revenues. c. inventory in producing revenues. d. accounts receivable in producing revenues.

102. On a classified balance sheet, current assets are customarily listed a. in alphabetical order. b. with the largest dollar amounts first. c. in the order of liquidity. d. in the order of acquisition.

103. Intangible assets are a. listed under current assets on the balance sheet. b. not listed on the balance sheet because they do not have physical substance. c. noncurrent resources. d. listed as a long-term investment on the balance sheet. 104. The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

105. The most important information needed to determine if companies can pay their current obligations is the a. net income for this year. b. projected net income for next year. c. relationship between current assets and current liabilities. d. relationship between short-term and long-term liabilities.

a106. A reversing entry a. reverses entries that were made in error. b. is the exact opposite of an adjusting entry made in a previous period. c. is made when a business disposes of an asset it previously purchased. d. is made when a company sustains a loss in one period and reverses the effect with a profit in the next period.

a 107. If a company utilizes reversing entries, they will a. be made at the beginning of the next accounting period. b. not actually be posted to the general ledger accounts. c. be made before the post-closing trial balance. d. be part of the adjusting entry process.

The following questions are from the Study Guide.

s108. The steps in the preparation of a work sheet do not include a. analyzing documentary evidence. b. preparing a trial balance on the work sheet. c. entering the adjustments in the adjustment columns. d. entering adjusted balances in the adjusted trial balance columns.

s109. Balance sheet accounts are considered to be a. temporary owner's equity accounts. b. permanent accounts. c. capital accounts. d. nominal accounts.

s110. Income Summary has a credit balance of $12,000 in J. Spencer` Co. after closing revenues and expenses. The entry to close Income Summary is a. credit Income Summary $12,000, debit J. Spencer, Capital $12,000. b. credit Income Summary $12,000, debit J. Spencer, Drawing $12,000. c. debit Income Summary $12,000, credit J. Spencer, Drawing $12,000. d. debit Income Summary $12,000, credit J. Spencer, Capital $12,000.

s111. The post-closing trial balance contains only a. income statement accounts. b. balance sheet accounts. c. balance sheet and income statement accounts. d. income statement, balance sheet, and owner's equity statement accounts. s112. Which one of the following statements concerning the accounting cycle is incorrect? a. The accounting cycle includes journalizing transactions and posting to ledger accounts. b. The accounting cycle includes only one optional step. c. The steps in the accounting cycle are performed in sequence. d. The steps in the accounting cycle are repeated in each accounting period.

s113. On September 23, the Polar Company received a $350 check from Mike Moluf for services to be performed in the future. The bookkeeper for Polar Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should a. debit Cash $350 and credit Unearned Service Revenue $350. b. debit Accounts Receivable $350 and credit Unearned Service Revenue $350. c. debit Accounts Receivable $350 and credit Cash $350. d. debit Accounts Receivable $350 and credit Service Revenue $350.

s114. Current liabilities a. must reasonably be expected to be paid from existing current assets or through the creation of other current liabilities. b. are listed in the balance sheet in order of their expected maturity. c. must reasonably be expected to be paid within one year or the operating cycle, whichever is shorter. d. should not include long-term debt that is expected to be paid within the next year.

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