Question

1. The classified Balance Sheet will divide its Liabilities Section as the following subsections

   		Current Liabilities and Long-Term Liabilities
   		Current Liabilities and Other Liabilities
   		Other Liabilities and Long-Term Liabilities
   		Present Liabilities and Tomorrow’s Liabilities

5 points   

QUESTION 34

1. After all of the account balances have been extended to the Income Statement columns of the work sheet, the totals of the debit and credit columns are $77,500 and $85,300, respectively. What is the amount of the net income or net loss for the period?

   		$7,800 net income
   		$7,800 net loss
   		$85,300 net income
   		$77,500 net loss

5 points   

QUESTION 35

1. The worksheet

   		is an integral part of the accounting cycle
   		eliminates the need to rewrite the financial statements
   		is a working paper that is required
   		is used to summarize account balances and adjustments for the financial statements

5 points   

QUESTION 36

1. The Balance Sheet should be prepared

   		before the income statement and the statement of owner’s equity
   		before the income statement and after the statement of owner’s equity
   		after the income statement and the statement of owner’s equity
   		after the income statement and before the statement of owner’s equity

Answer 1

• [1]
  Correct Answer = Option #1
  Classified Balance Sheet classifies liabilities into Current Liabilities and Long Term Liabilities.
• [2]
  Credits are more than Debit which means it’s a NET Income
  Net Income = 85300 – 77500 = $ 7800
  Correct Answer = Option #1 $ 7800 Net Income
• [3]
  The worksheet has unadjusted balance, adjustments, adjusted balance, income statement and balance sheet amount in a summarised table.
  Correct Answer = Option #4: It is used to summarise accounts balances and adjustements for financial statements.
• [4]
  Correct Answer = Option #3: Balance sheet is to be prepared after the income statement and the statement of Owner’s equity.
  This is because Net Income (loss) is required for Owner’s Equity, and Owner’ equity balance is required in the Balance Sheet.