Question 1

On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income Statement columns of the work sheet.

Accepted Answer

A) True 
 B)False

Question 2

K. Canopy, the proprietor of Canopy Services, withdrew $5,700 from the business during the current year. The entry to close the withdrawals account at the end of the year is:

Accepted Answer

A)  Debit K. Canopy, Capital $5,700, credit Salary Expense $5,700
B)  Debit K Canopy, Withdrawals $5,700; credit Cash, $5,700
C)  Debit Income Summary $5,700; credit K. Canopy, Capital $5,700
D)  Debit K. Canopy, Capital $5,700; credit K. Canopy, Withdrawals $5,700
E)  Debit K. Canopy, Withdrawals $5,700; credit K. Canopy, Capital $5,700F) None of the above
G) A) and D)

Question 3

The purpose of reversing entries is to:

Accepted Answer

A)  Make certain that only permanent accounts are carried forward into the next accounting period.
B)  Complete a required step in the accounting cycle.
C)  Correct errors made in previous journal entries.
D)  Ensure that closing entries have been properly posted to the ledger accounts.
E)  Simplify a company's recording of certain journal entries in the future.F) B) and C)
G) A) and B)

Question 4

Closing entries are required at the end of each accounting period to close all ledger accounts.

Accepted Answer

A) True 
 B)False

Question 5

The trial balance prepared after all closing entries have been journalized and posted is called the:

Accepted Answer

A)  Work sheet.
B)  Adjusted trial balance.
C)  General ledger.
D)  Unadjusted trial balance.
E)  Post-closing trial balance.F) B) and C)
G) B) and D)

Question 6

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Accepted Answer

A) True 
 B)False

Question 7

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. What is the correct closing entry for the expense accounts?

Accepted Answer

A)  Debit Expense accounts $39,800; credit Income Summary $39,800.
B)  Debit Expense accounts $37,000; credit F. Mercury, Capital $37,000.
C)  Credit Expense accounts $39,800; debit F. Mercury, Capital $39,800.
D)  Debit Income Summary $39,800; credit F. Mercury Capital $39,800.
E)  Debit Income Summary $39,800; credit Expense accounts $39,800.F) A) and D)
G) D) and E)

Question 8

Explain the purpose of reversing entries.

Accepted Answer

Reversing entries are an optional step i...

Question 9

Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. Its current ratio is 0.417.

Accepted Answer

A) True 
 B)False

Question 10

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

Accepted Answer

A) True 
 B)False

Question 11

If the Balance Sheet and Statement of Owner's Equity columns of a work sheet fail to balance when the net income is added to the Balance Sheet and Statement of Owner's Equity Credit column, the cause could be:

Accepted Answer

A)  An expense entered in the Balance Sheet and Statement of Owner's Equity Credit column.
B)  A liability amount entered in the Income Statement and Statement of Owner's Equity Credit column.
C)  An expense entered in the Balance Sheet and Statement of Owner's Equity Debit column.
D)  A revenue entered in the Balance Sheet and Statement of Owner's Equity Credit column.
E)  An asset amount entered in the Income Statement and Statement of Owner's Equity Debit column.F) D) and E)
G) A) and D)

Question 12

In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is:

Accepted Answer

A)  A liability amount placed in the Income Statement Credit column.
B)  A liability amount placed in the Balance Sheet Debit column.
C)  An asset amount placed in the Balance Sheet Credit column.
D)  An expense amount placed in the Balance Sheet Credit column.
E)  A revenue amount placed in the Balance Sheet Debit column.F) D) and E)
G) B) and C)

Question 13

The steps in the closing process are (1)close credit balances in revenue accounts to Income Summary; (2)close debit balances in expense accounts to Income Summary; (3)close Income Summary to Owner's Capital; (4)close Withdrawals to Owner's Capital.

Accepted Answer

A) True 
 B)False

Question 14

A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Wilson Peters, Capital in the process of closing the Income Summary account? (Assume all accounts have normal balances.) 
  Revenue 29,000 Rent expense 3,600 Salaries expense 7,200 Insurance expense 920 Depr.Expense-equipment 500 Accum depr-equipment 1,500\begin{array}{lr}	ext { Revenue }&29,000\	ext { Rent expense } & 3,600 \	ext { Salaries expense } & 7,200 \	ext { Insurance expense } & 920 \	ext { Depr.Expense-equipment } & 500 \	ext { Accum depr-equipment } & 1,500\end{array} Revenue  Rent expense  Salaries expense  Insurance expense  Depr.Expense-equipment  Accum depr-equipment ​29,0003,6007,2009205001,500​

Accepted Answer

A)  $7,180 credit.
B)  $16,780 credit.
C)  $16,780 debit.
D)  $23,780 credit.
E)  $18,280 credit. F) C) and E)
G) C) and D)

Question 15

If all columns of a completed work sheet balance, you can be sure that no errors were made in its preparation.

Accepted Answer

A) True 
 B)False

Question 16

Closing entries are necessary so that owner's capital will begin each period with a zero balance.

Accepted Answer

A) True 
 B)False

Question 17

On a work sheet, if the Debit total exceeds the Credit total of the Income Statement columns, a net loss is indicated.

Accepted Answer

A) True 
 B)False

Question 18

All of the following regarding the current ratio are true except:

Accepted Answer

A)  Current ratio is calculated by dividing current assets by current liabilities.
B)  Current ratio can reveal challenges in covering short-term obligations if it is less than 1.
C)  Current ratio can affect a creditor's decision about whether to lend money to a company.
D)  Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit.
E)  Current ratio helps to assess a company's ability to pay its debts in the near future.F) B) and C)
G) None of the above

Question 19

How is the current ratio calculated? How is it used to evaluate a company?

Accepted Answer

The current ratio is current assets divi...

Question 20

Reversing entries:

Accepted Answer

A)  Are prepared on the worksheet.
B)  Are mandatory.
C)  Are optional.
D)  Correct errors in journal entries.
E)  Are required by GAAP.F) B) and D)
G) B) and E)

Exam 4: Completing the Accounting Cycle

On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income Statement columns of the work sheet.

Correct Answer
verified

If the Balance Sheet and Statement of Owner's Equity columns of a work sheet fail to balance when the net income is added to the Balance Sheet and Statement of Owner's Equity Credit column, the cause could be:

Correct Answer
verified

The steps in the closing process are (1)close credit balances in revenue accounts to Income Summary; (2)close debit balances in expense accounts to Income Summary; (3)close Income Summary to Owner's Capital; (4)close Withdrawals to Owner's Capital.

Correct Answer
verified

K. Canopy, the proprietor of Canopy Services, withdrew $5,700 from the business during the current year. The entry to close the withdrawals account at the end of the year is:

Correct Answer
verified

Explain the purpose of reversing entries.

Correct Answer
verified
Reversing entries are an optional step i...
View Answer

The trial balance prepared after all closing entries have been journalized and posted is called the:

Correct Answer
verified

How is the current ratio calculated? How is it used to evaluate a company?

Correct Answer
verified
The current ratio is current assets divi...
View Answer

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. What is the correct closing entry for the expense accounts?

Correct Answer
verified

In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is:

Correct Answer
verified

If all columns of a completed work sheet balance, you can be sure that no errors were made in its preparation.

Correct Answer
verified

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Correct Answer
verified

Reversing entries:

Correct Answer
verified

Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. Its current ratio is 0.417.

Correct Answer
verified

All of the following regarding the current ratio are true except:

Correct Answer
verified

Closing entries are necessary so that owner's capital will begin each period with a zero balance.

Correct Answer
verified

Closing entries are required at the end of each accounting period to close all ledger accounts.

Correct Answer
verified

Correct Answer
verified

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

Correct Answer
verified

The purpose of reversing entries is to:

Correct Answer
verified

On a work sheet, if the Debit total exceeds the Credit total of the Income Statement columns, a net loss is indicated.

Correct Answer
verified

Exam 4: Completing the Accounting Cycle

On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income Statement columns of the work sheet.

Correct AnswerverifiedShow Answer

If the Balance Sheet and Statement of Owner's Equity columns of a work sheet fail to balance when the net income is added to the Balance Sheet and Statement of Owner's Equity Credit column, the cause could be:

Correct AnswerverifiedShow Answer

The steps in the closing process are (1)close credit balances in revenue accounts to Income Summary; (2)close debit balances in expense accounts to Income Summary; (3)close Income Summary to Owner's Capital; (4)close Withdrawals to Owner's Capital.

Correct AnswerverifiedShow Answer

K. Canopy, the proprietor of Canopy Services, withdrew $5,700 from the business during the current year. The entry to close the withdrawals account at the end of the year is:

Correct AnswerverifiedShow Answer

Explain the purpose of reversing entries.

Correct AnswerverifiedReversing entries are an optional step i...View AnswerShow Answer

The trial balance prepared after all closing entries have been journalized and posted is called the:

Correct AnswerverifiedShow Answer

How is the current ratio calculated? How is it used to evaluate a company?

Correct AnswerverifiedThe current ratio is current assets divi...View AnswerShow Answer

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. What is the correct closing entry for the expense accounts?

Correct AnswerverifiedShow Answer

In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is:

Correct AnswerverifiedShow Answer

If all columns of a completed work sheet balance, you can be sure that no errors were made in its preparation.

Correct AnswerverifiedShow Answer

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Correct AnswerverifiedShow Answer

Reversing entries:

Correct AnswerverifiedShow Answer

Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. Its current ratio is 0.417.

Correct AnswerverifiedShow Answer

All of the following regarding the current ratio are true except:

Correct AnswerverifiedShow Answer

Closing entries are necessary so that owner's capital will begin each period with a zero balance.

Correct AnswerverifiedShow Answer

Closing entries are required at the end of each accounting period to close all ledger accounts.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

Correct AnswerverifiedShow Answer

The purpose of reversing entries is to:

Correct AnswerverifiedShow Answer

On a work sheet, if the Debit total exceeds the Credit total of the Income Statement columns, a net loss is indicated.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Reversing entries are an optional step i...
View Answer

Correct Answer
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Correct Answer
verified
The current ratio is current assets divi...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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