(R) COMPLETION STATEMENTS 1.

The first step in preparing a work sheet is to prepare a ______________ from the

general ledger accounts. 2. The account balances appearing in the adjusted trial balance columns are extended

to the ______________ columns and the ______________ columns. 3. The process of transferring net income (or loss) for the period to Owner's Capital is

accomplished by making ______________ entries. 4. At the end of an accounting period, all revenue and expense accounts are closed to

a temporary account called ______________. 5. The Owner's Drawing account is closed to the ______________ account at the end

of the accounting period. 6. After all closing entries have been journalized and posted, the final step in the

accounting cycle is to prepare a ______________ trial balance. 7. The preparation of a ______________ and ______________ entries are two

optional steps in the accounting cycle. 8. Two permanent accounts that are part of the stockholder's equity in a corporation

are ______________ and ______________. 9. The four major classifications of assets in a classified balance sheet are:

________________, ________________, ________________ and ________________. 10. The ______________ of a company is the average length of time that is required to

go from cash to cash in producing revenues. 11. Resources that do not have a physical substance but provide value to the company

because of certain rights and privileges that they confer are called ______________ assets. 12. Liabilities are generally classified as either ______________ or ______________ on

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(S) MTCHING: MATCH THE ITEMS BELOW BY ENTERING THE APPROPRIATE CODE LETTER IN THE SPACE PROVIDED. A. B. C. D. E. Work sheet Permanent accounts Closing entries Income Summary Reversing entry F. G. H. I. J. Capital Stock Current assets Operating cycle Long-term liabilities Correcting entries

______ 1. Obligations expected to be paid after one year.

______ 2. A part of owners' equity in a corporation.

______ 3. An optional tool which facilitates the preparation of financial statements.

______ 4. A temporary account used in the closing process.

______ 5. Balance sheet accounts whose balances are carried forward to the next period.

______ 6. The average length of time to go from cash to cash in producing revenue.

______ 7. Entries to correct errors made in recording transactions.

______ 8. The exact opposite of an adjusting entry made in a previous period.

______ 9. Entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent owner's equity account.

______ 10. Resources which are expected to be realized in cash, sold, or consumed within one year of the balance sheet or the company's operating cycle, whichever is longer.

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(T) COMPLETION STATEMENTS 1. The rules and practices that serve as general guides for financial reporting are called ______________. 2. Substantial authoritative support for accounting practices generally comes from two standard-setting bodies which are (1)______________ and the (2)_______________. 3. The FASB has developed a ______________ to serve as a basis for resolving accounting and reporting problems. 4. A major objective of financial reporting and an overriding criterion for evaluating accounting information is ______________. 5. For accounting information to be relevant, it must have (1)______________ value, or (2)_______________ value and must be reported on a (3)________________. 6. Accounting information that is verifiable, representationally faithful, and neutral, enhances the _______________ of the accounting information. 7. When different companies use the same accounting principles for similar transactions, their financial statements are said to be ______________. 8. The ______________ assumption assumes that the enterprise will continue in operation long enough to carry out its existing objectives and commitments. 9. The ______________ method of revenue recognition is appropriate for long-term construction contracts where reliable estimates of total ______________ can be made. 10. Under the _______________ method, gross profit is recognized in the period in which cash is collected. 11. The constraint of _______________ refers to items in financial statements that are likely to influence the decision of a reasonably prudent investor or creditor. 12. The constraint of _______________ means that when in doubt choose the accounting method that will be least likely to overstate assets and income.

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(U) MATCHING: MATCH THE ITEMS BELOW BY ENTERING THE APPROPRIATE CODE LETTER IN THE SPACE PROVIDED. A. B. C. D. E. F. Relevance Feedback value Comparability Consistency Time period assumption Going concern assumption G. H. I. J. K. L. Percentage-of-completion method Installment method Full disclosure principle Materiality Economic entity assumption Multinational corporations

______ 1. Requires that events that make a difference to financial statement users be disclosed. ______ 2. Revenue is recognized on a cash basis. ______ 3. Information that has a bearing on a decision. ______ 4. Different companies using the same accounting principles. ______ 5. An item important enough to influence a prudent investor. ______ 6. Same accounting principles and methods used from year to year within a company. ______ 7. Economic events can be identified with a particular business. ______ 8. Economic life of business can be divided into artificial time periods. ______ 9. Provides justification for depreciation policy and current/noncurrent classifications in the balance sheet. ______ 10. Firms that conduct their operations in more than one country. ______ 11. When information confirms or corrects prior expectations. ______ 12. Appropriate for certain long-term construction contracts.

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