FNU ACG2003 2022 October Week 3 Quiz Latest

ACG2003 Principles of Accounting

Week 3 Quiz

Question 1A business with highly seasonal operations may adopt a fiscal year that:

ends when business activities have reached their highest point in its operating cycle.

corresponds to the calendar year.

ends when business activities have reached their lowest point in its operating cycle.

is dictated by the IRS.

Question 2When there is a net loss, the entry to close Income Summary will include a:

debit to the owner's capital account.

debit to Income Summary.

debit to the drawing account.

credit to Cash.

Question 3In the sequence of accounting cycle steps, which step follows the preparation of the adjusted trial balance?

Adjusting entries are journalized and posted.

The optional end-of-period spreadsheet is prepared.

Financial statements are prepared.

Closing entries are journalized and posted to the ledger.

Question 4Which if the following is NOT true about closing entries?

Closing entries move the balances of nominal accounts to the owner's capital account.

Closing entries are an optional step in the accounting cycle.

Closing entries are made later in the accounting cycle than adjusting entries.

Closing entries are made before the post-closing trial balance is prepared.

Question 5Which account would appear in the post-closing trial balance?

Salaries Payable

Supplies Expense

Depreciation Expense

Fees Earned

Question 6The process that begins with analyzing and journalizing transactions is called the:

accounting cycle.

ledger cycle.

balance cycle.

operating cycle.

Question 7Two common classifications of liabilities are:

current assets and current liabilities.

current assets and property, plant, and equipment.

current liabilities and long-term liabilities.

property, plant, and equipment and long-term liabilities.

Question 8Two common classifications of assets are:

current assets and current liabilities.

current assets and property, plant, and equipment.

current liabilities and long-term liabilities.

property, plant, and equipment and long-term liabilities.

Question 9Which of the following is true regarding the flow of data from the Adjusted Trial Balance columns of the end-of-period spreadsheet to the financial statements?

The balance of the owner's capital account will flow into the balance sheet.

The balance of the accumulated depreciation account will flow into the income statement.

The balance of the owner's drawing account will flow into the statement of owner's equity.

The balance of the revenue account will flow into the statement of owner's equity.

Question 10Which of the following is NOT true regarding the current ratio?

It is a measure for evaluating a business's short-term liquidity and solvency.

It is computed as current assets less current liabilities.

It allows comparisons across companies of different sizes.

A result of 1.98 is more favorable than a result of 1.45.