Which of the following statements best explains why adjustments need to be made at the end of every accounting period?
A) Accountants like to do lots of unnecessary extra work.
B) Certain accounts may need to be updated at the end of the period because of the presence of accruals and deferrals.
C) To correct errors made during the period.
D) Cash may be missing at the end of the period.
(
Q. 2) The purpose of ____ control goals is to ensure that all resources used throughout the business process are being employed in the most productive manner.
a. efficiency
b. effectiveness
c. security
d. input
(
Q. 3) Mufti Company issued 1,500 shares of its 1 par value common stock. The market price on the day of sale was 15 per share. Describe the effect of this transaction on each of the following items:
1. Cash
2. Total paid-in capital
3. Capital stock
4. Additional paid-in capital
(
Q. 4) An account number in the Posting Reference column of the general journal indicates that the account has been posted to the general ledger.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 5) The direct writeoff method records bad debt expense when an account is determined to be uncollectible.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 6) A corporation's distribution of new shares of stock to the corporation's current shareholders is called a ________.
A) cash dividend
B) liquidating dividend
C) stock dividend
D) stock split
Quick Reply
