Which of the following statements about reversing entries is true a Identical

Which of the following statements about reversing

This preview shows page 24 - 26 out of 26 pages.

6. Which of the following statements about reversing entries is true?
Image of page 24
a. Identical account balances are achieved in the subsequent accounting period whether reversingentries are utilized or not.b. Reversing entries may not be used with accrued revenues.c. Reversals are generally applied to those adjusting items that do not involve future cash flow.d. Reversing entries would not be prepared if a company also utilized closing entries.Answera 7. Shipman Company had accrued salaries of $300 on December 31. The company recorded reversingentries on the following January 1. On the next payday, January 7, the appropriate entry to record thepayment of $1,000 in salaries should include: 8. Current assets are those assets which management intends to convert into cash or consume within: 9. On a classified balance sheet, the appropriate ordering of specific classifications is:
Image of page 25
Answer a 10. If a company had a current ratio of 0.5, then which of the following statements regarding thatcompany's working capital would be true? a. The company's working capital would be positive.b. The company's working capital would be zero.c. The company's working capital would be negative.d. The company's working capital would be 2:1.Answerc
Image of page 26

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture