1. Our financial situation is the best for all times” said the manager of TAXO Co. From which report the manager come to this conclusion?
A. Balance sheet
B. Income statement
C. Cost of the goods sold
D. Cash flow statement
E. Statement of Owner’s Equity
2.................. is the process by which the financial statements are produced for a specific period of time.
A. Accounting process
B. Closing process
C. Closing cycle
D. Accounting cycle
E. Steps of closing process
3. Which of the following can be reported in balance sheet?
A. Sales revenue
B. Rent expense
C. Salary payable
D. Salary expense
E. Depreciation expense
4. Which of the following can be reported in income statement?
A. Account receivable
B. Sales revenue
C. Accumulated Depreciation
D. Capital
E. Raw materials
5. The company has a notes payable which has a due date of 6 months. In which section of the balance sheet company should report this?
A. Non-current assets
B. Owner’s equity
C. Current assets
D.Non-current liabilities
E. Current liabilities
6. Which of the following is true for classified balance sheet?
A. Assets are reported according to their liquidity
Current liabilities have maturity dates more than 12 months
C. Non-current assets must be financed only by current liabilities
D. Owner’s equity should only finance current assets
E. Maturity dates of current liabilities are longer than non-current liabilities
7. Company leased machinery and equipment to use in the operations. How does the company report these elements?
A. As non-current asset in balance sheet
B. As rent expense in income statement
C. As capital in owner’s equity
D. As current liability in balance sheet
E. As non-current liability in balance sheet
8. Which of the following is true for closing process?
A. Revenue accounts are credited when closing
B. Expense accounts are debited when closing
C. Income Summary account holds revenues on credit side
D. Expense accounts’ balance are posted to credit side of Income Summary account
E. Revenue accounts’ balance are posted to Capital account directly
9. The company has 10,000 liras of revenues and 7,500 liras of expenses. Which of the following statement is true for closing transactions?
A. 2,500 liras of revenue will be posted to Income Summary account
B. 7,500 liras of expense will be posted to credit side of Income Summary account
C. 10,000 liras of revenue will be posted to debit side of Income Summary account
D. The company has a loss of 2,500 liras
E. 10,000 liras of revenue will be posted to credit side on Income Summary account
10. The last step in the accounting cycle is:
A. Preparing balance sheet
B. Preparing income statement
C. Making closing entries
D. Preparing post-closing trial balance
E. Making adjustment entries
