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Exam 4: The Accounting Cycle

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Question 31

Multiple Choice

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Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month of operations on March 31?

A) $8,400
B) $840
C) $700
D) $7,700

E) B) and D)
F) B) and C)

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Question 32

Multiple Choice

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Prepaid insurance is reported on the balance sheet as a

A) current asset
B) fixed asset
C) current liability
D) long-term liability

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

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Question 33

Multiple Choice

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Of the following steps of the accounting cycle, which step should be completed first?

The usual presentation of the retained earnings statement is (1) Beginning balance, (2) Net income or loss, (3) Dividends, (4) Stockholders' investments, (5) Ending balance.

The first item appearing on the statement of stockholders' equity is

During the end-of-period processing, which of the following best describes the logical order of steps?

On the end-of-period spreadsheet, the common stock and dividends account balances are extended to the Balance Sheet columns.

The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet: Net income for the period is

The end-of-period spreadsheet is not considered a part of the formal accounting records.

Match each journal entry that follows with one of the types of journal entries (a-c) below. -Dividends 215 Cash 215 A)Journal entries B)Adjusting journal entries C)Closing journal entries

An end-of-period spreadsheet heading is dated for a period of time.

Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities.

Beachside Realty rents condominiums and furnishings. Below is the adjusted trial balance at December 31. Prepare the closing entry required to transfer the income or loss at the end of the period.

Shores Sports rents canoes and kayaks. Below is the adjusted trial balance at December 31.​ The entry required to close the revenue and expense accounts at the end of the period includes a:

Accumulated Depreciation appears on the

In the accounting cycle, the last step is

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

Indicate whether each of the following would be reported in the financial statements as a (a) current asset, (b) current liability, (c) revenue, or (d) expense:

Accrued revenues are ordinarily listed on the balance sheet as current liabilities.

The following is the adjusted trial balance for Miller Company. Prepare closing entries and the post-closing trial balance.