LATIHAN

TRUE-FALSE STATEMENTS
1. A worksheet is a mandatory form that must be prepared along with an income statement
and statement of financial position.

2. If a worksheet is used, financial statements can be prepared before adjusting entries are
journalized.

3. If total credits in the income statement columns of a worksheet exceed total debits, the
enterprise has net income.

4. It is not necessary to prepare formal financial statements if a worksheet has been

prepared because financial position and net income are shown on the worksheet.

5. The adjustments on a worksheet can be posted directly to the accounts in the ledger
from the worksheet.

6. The adjusted trial balance columns of a worksheet are obtained by subtracting the
adjustment columns from the trial balance columns.

7. The balance of the depreciation expense account will appear in the income statement
debit column of a worksheet.

8. The procedures used to prepare the worksheet are the same under both IFRS and
GAAP.

9. The last 2 columns on a worksheet prepared under IFRS contains data for the Retained
Earnings Statements.

10. The format of the data in the Statement of Financial Position columns of the worksheet is
the same as the format of the Statement of Financial Position.

11. No permanent account balances are changed in the closing process.

12. Closing entries are unnecessary if the business plans to continue operating in the future
and issue financial statements each year.
13. The Dividends account is closed to the Income Summary account in order to properly
determine net income (or loss) for the period.

14. After closing entries have been journalized and posted, all temporary accounts in the
ledger should have zero balances.

15. Closing revenue and expense accounts to the Income Summary account is an optional
bookkeeping procedure.
16. Closing the Dividends account to Retained Earnings is not necessary if net income is
greater than dividends paid during the period.

17. The Dividends account is a permanent account whose balance is carried forward to the
next accounting period.

18. Closing entries are journalized after adjusting entries have been journalized.

19. The amounts appearing on an income statement should agree with the amounts
appearing on the post-closing trial balance.

20. The post-closing trial balance is entered in the first two columns of a worksheet.

21. The post-closing trial balance only contains Statement of Financial Position account
balances.

22. The purpose of the post-closing trial balances is to prove the equality of the Statement of
Financial Position.

23. The order of the accounts in the post-closing trial balance is the same order as the
accounts appearing in the Statement of Financial Position.

24. The preparation of a Statement of Financial Position is a required step in the accounting
cycle.
25. Step number 6 in the accounting cycle includes preparation of the Statement of Financial
Position.

26. A business entity has only one accounting cycle over its economic existence.

27. Both correcting entries and adjusting entries always affect at least one statement of
financial position account and one income statement account.
28. Correcting entries are made any time an error is discovered even though it may not be at
the end of an accounting period.

29. An incorrect debit to Accounts Receivable instead of the correct account Notes
Receivable does not require a correcting entry because total assets will not be
misstated.

30. Correcting entries will never affect statement of financial position accounts.

31. Current assets are the first category of assets reported on the Statement of Financial
Position.

32. IFRS permits the noncurrent classifications to be reported before the current
classifications on the statement of financial position
33. IFRS requires that current assets be reported on the statement of financial position in
the order of their liquidity.

34. A company's operating cycle and fiscal year are usually the same length of time.

35. Cash and office supplies are both classified as current assets.

36. Long-term investments would appear in the property, plant, and equipment section of the
statement of financial position.
37. A liability is classified as a current liability if the company is to pay it within the
forthcoming year.

38. A company's liquidity is concerned with the relationship between long-term investments
and long-term debt.
39. Intangible assets are customarily the first items listed on a classified statement of
financial position.

40. The operating cycle of a company is determined by the number of years the company
has been operating.

a
41. Reversing entries are an optional bookkeeping procedure.

a
42. Reversing entries will always affect statement of financial position accounts.

a
43. The use of reversing entries will change the amounts reported in the statement of
financial position.

44. After a worksheet has been completed, the statement columns contain all data that are
required for the preparation of financial statements.

45. To close net income to Retained Earnings Income Summary is debited and Retained
Earnings is credited.

46. In one closing entry, the Dividends account is credited and Income Summary is debited.

47. The post-closing trial balance will contain only statement of equity accounts and
statement of financial position accounts.

48. The operating cycle of a company is the average time required to collect the receivables
resulting from producing revenues.

49. Current assets are listed in the reverse order of liquidity.

50. Current liabilities are obligations that the company is to pay within the coming year.