MULTIPLE CHOICE With Answers

MULTIPLE CHOICE

1. The balance sheet reports
a.
assets.
b.
revenue.
c.
expenses.
d.
net income.

ANS: A DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication

2. The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the
a.
Income Statement columns.
b.
Adjustments columns.
c.
Balance Sheet columns.
d.
Adjusted Trial Balance columns.

ANS: A DIF: Easy OBJ: LO 5-2 MSC: AACSB Communication

3. The third pair of columns on a 10-column work sheet prepared at the end of the period would be the
a.
Income Statement columns.
b.
Adjustments columns.
c.
Balance Sheet columns.
d.
Adjusted Trial Balance columns.

ANS: D DIF: Easy OBJ: LO 5-2 MSC: AACSB Communication

4. The second pair of columns on a 10-column work sheet prepared at the end of the period would be the
a.
Income Statement columns.
b.
Trial Balance columns.
c.
Adjustments columns.
d.
Adjusted Trial Balance columns.

ANS: C DIF: Easy OBJ: LO 5-2 MSC: AACSB Communication

5. The time an asset is expected to last is called its
a.
depreciation.
b.
fiscal period.
c.
net loss value.
d.
useful life.

ANS: D DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication

6. Matching the cost of an asset with the revenue it is expected to produce is called
a.
adjusting.
b.
expensing.
c.
depreciation.
d.
contra-valuing.

ANS: C DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication

7. The cost of an asset that is subject to depreciation is called
a.
salvage value.
b.
depreciable cost.
c.
revenue.
d.
trade-in value.

ANS: B DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication

8. An account used with a related account to bring about a decrease in the net amount of the two account balances is called a(n)
a.
contra-account.
b.
expense account.
c.
adjusting account.
d.
revenue account.

ANS: A DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication

9. If the book value of an asset is $12,500 and the accumulated depreciation is $3,500, the original cost of the asset is
a.
$16,000.
b.
$9,500.
c.
$9,000.
d.