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Exam 4: Completing the Accounting Cycle

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Question 81

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Use the adjusted trial balance for Stockton Company to answer the questions that follow. ? $\begin{array}{c}\hline &&&&&&&&&&&\textbf { Stockton Company }&&&&&&&&&& \\\hline &&&&&&&&&&&\textbf { Adjusted Trial Balance }&&&& \\\hline &&&&&&&&&&&\textbf { December 31} &&&&\end{array}$ $\begin{array}{|l|c|c|c|}\hline & \begin{array}{c}\textbf { Account } \\\textbf { No. }\end{array} & \begin{array}{c}\textbf { Debit } \\\textbf { Balances }\end{array} & \begin{array}{c}\textbf { Credit } \\\textbf { Balances }\end{array} \\\hline \text { Cash } & 11 & 6,530 & \\\hline \text { Accounts Receivable } & 12 & 2,100 & \\\hline \text { Prepaid Expenses } & 13 & 700 & \\\hline \text { Equipment } & 18 & 13,700 & \\\hline \text { Accumulated Depreciation } & 19 & & 1,100 \\\hline \text { Accounts Payable } & 21 & & 1,900 \\\hline \text { Notes Payable } & 22 & & 4,300 \\\hline \text { Bob Steely, Capital } & 31 & & 12,940 \\\hline \text { Bob Steely, Drawing } & 32 & 790 & \\\hline \text { Fees Earned } & 41 & & 9,250 \\\hline \text { Wages Expense } & 51 & 2,500 & \\\hline \text { Rent Expense } & 52 & 1,960 & \\\hline \text { Utilities Expense } & 53 & 775 & \\\hline \text { Depreciation Expense } & 54 & 250 & \\\hline \text { Miscellaneous Expense } & 59 & \underline{185} &\_\_\_\_\_ \\\hline \text { Totals } & & \underline{\textbf{29,490}} & \underline{\textbf{29,490}} \\\hline\end{array}$ -Use the adjusted trial balance for Stockton Company. Determine the current assets.

A) $23,030
B) $9,330
C) $21,930
D) $8,630

E) All of the above
F) A) and D)

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Question 82

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A net loss is shown on the work sheet in the Credit columns of both the Income Statement columns and the Balance Sheet columns.

A) True
B) False

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Question 83

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Describe a classified balance sheet.

Identify which of the following accounts should be closed with a debit or a credit at the end of the fiscal year. If it is not closed, mark as n/a.​ 1. Utilities Payable 2. Utilities Expense 3. Supplies 4. Supplies Expense 5. Fees Earned 6. Unearned Fees 7. Accounts Receivable 8. Jason Hill, Drawing 9. Jason Hill, Capital 10. Accumulated Depreciation-Equipment 11. Depreciation Expense-Equipment 12. Equipment 13. Prepaid Insurance 14. Insurance Expense

Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets.

The balances for the accounts listed below appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet (work sheet). Indicate whether each balance would flow to (a) the income statement, (b) the statement of owner's equity, or (c) the balance sheet.​ 1. Accounts Payable 2. Dobson, Drawing 3. Depreciation Expense 4. Accumulated Depreciation 5. Fees Earned 6. Unearned Fees 7. Supplies 8. Supplies Expense

Which of the following accounts should be closed to the capital account at the end of the year?

The balance in the capital account on the worksheet will equal the amount presented in the balance sheet.

Once an account has been closed for the period, inserting a line in the balance columns zeros out the account, making it ready for the following period.

Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period.

The journal entry to close Fees Earned, $750, and Rent Revenue, $175, during the year-end closing process would be

Closing entries

Hannah Roberts owns and operates Hannah's Pool Service Company. On January 1, Hannah Roberts, Capital had a balance of $252,000. During the year, Hannah invested an additional $32,000 and withdrew $52,400. For the year ended December 31, Hannah's Pool Service Company reported a net income of $73,200. Prepare a statement of owner's equity for the year ended December 31.

Which of the following accounts ordinarily appears in the post-closing trial balance?

The drawing account is a temporary account.

The most important output of the accounting cycle is the financial statements.

Accrued fees earned but not recorded at August 31 are $25,750. Which of the following is correct for the reversing entry on September 1?

The natural business year is a

The accounting cycle requires three trial balances be done. In what order should they be prepared?

The entry to close the appropriate insurance account at the end of the accounting period is