ACC 557 Midterm Exam Part 1 Question 1
Equipment is classified in the balance sheet as
• a current asset.
• property, plant, and equipment.
• an intangible asset.
• a long-term investment.

Question 2
Correcting entries are made
• at the beginning of an accounting period.
• at the end of an accounting period.
• whenever an error is discovered.
• after closing entries.

Question 3
The first required step in the accounting cycle is
• reversing entries.
• journalizing transactions in the book of original entry.
• analyzing transactions.
• posting transactions.

Question 4
The net income (or loss) for the period
• is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.
• cannot be found on the worksheet.
• is found by computing the difference between the income statement columns of the worksheet.
• is found by computing the difference between the trial balance totals and the adjusted trial balance totals.

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Question 5
The purpose of the post-closing trial balance is to
• prove that no mistakes were made.
• prove the equality of the balance sheet account balances that are carried forward into the next accounting period.
• prove the equality of the income statement account balances that are carried forward into the next accounting period.
• list all the balance sheet accounts in alphabetical order for easy reference.

Question 6
All of the following are property, plant, and equipment except
• supplies.
• machinery.
• land.
• buildings.

Question 7
The operating cycle of a company is the average time that is required to go from cash to
• sales in producing revenues.
• cash in producing revenues.
• inventory in producing revenues.
• accounts receivable in producing revenues.

Question 8
An accounting