1. Our financial situation is the best for all times” said the manager of TAXO Co. From which report the manager come to this conclusion?
   

ABalance sheet

BIncome statement

CCost of the goods sold

DCash flow statement

EStatement of Owner’s Equity

2.................. is the process by which the financial statements are produced for a specific period of time.

AAccounting process

BClosing process

CClosing cycle

DAccounting cycle

ESteps of closing process

1. Which of the following can be reported in balance sheet?
   

ASales revenue

BRent expense

CSalary payable

DSalary expense

EDepreciation expense

1. Which of the following can be reported in income statement?
   

AAccount receivable

BSales revenue

CAccumulated Depreciation

DCapital

ERaw materials

1. The company has a notes payable which has a due date of 6 months. In which section of the balance sheet company should report this?
   

ANon-current assets

BOwner’s equity

CCurrent assets

D.Non-current liabilities

ECurrent liabilities

1. Which of the following is true for classified balance sheet?
   

AAssets are reported according to their liquidity

Current liabilities have maturity dates more than 12 months

CNon-current assets must be financed only by current liabilities

DOwner’s equity should only finance current assets

EMaturity dates of current liabilities are longer than non-current liabilities

1. Company leased machinery and equipment to use in the operations. How does the company report these elements?
   

AAs non-current asset in balance sheet

BAs rent expense in income statement

CAs capital in owner’s equity

DAs current liability in balance sheet

EAs non-current liability in balance sheet

1. Which of the following is true for closing process?
   

ARevenue accounts are credited when closing

BExpense accounts are debited when closing

CIncome Summary account holds revenues on credit side

DExpense accounts’ balance are posted to credit side of Income Summary account

ERevenue accounts’ balance are posted to Capital account directly

1. The company has 10,000 liras of revenues and 7,500 liras of expenses. Which of the following statement is true for closing transactions?
   

A2,500 liras of revenue will be posted to Income Summary account

B7,500 liras of expense will be posted to credit side of Income Summary account

C10,000 liras of revenue will be posted to debit side of Income Summary account

DThe company has a loss of 2,500 liras

E10,000 liras of revenue will be posted to credit side on Income Summary account

1. The last step in the accounting cycle is:
   

APreparing balance sheet

BPreparing income statement

CMaking closing entries

DPreparing post-closing trial balance

EMaking adjustment entries