Question 1

The usual order for the asset subgroups of a classified balance sheet is:

Accepted Answer

A)   Current assets, long-term investments, plant assets, intangible assets.
B)   Plant assets, intangible assets, long-term investments, current assets.
C)   Intangible assets, current assets, long-term investments, plant assets.
D)   Current assets, prepaid expenses, long-term investments, intangible assets.
E)   Long-term investments, current assets, plant assets, intangible assets.F) A) and B)
G) A) and C)

Question 2

In the process of completing a work sheet, the accountant determines that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss)  for the period into the work sheet would require an entry to

Accepted Answer

A)   it is not practical to enter Net Income (or Net Loss)  on the work sheet.
B)   the Balance Sheet & Statement of Owner's Equity debit column and the Income Statement credit column.
C)   the Adjustments debit column and the Adjustments credit column.
D)   the Unadjusted Trial Balance debit column and the Adjustments credit column.
E)   the Income Statement debit column and the Balance Sheet & Statement of Owner's Equity credit column.F) A) and E)
G) All of the above

Question 3

Revenues, expenses, withdrawals, and Income Summary are called ________ accounts because they are closed at the end of each accounting period.

Accepted Answer

temporary ...

Question 4

Closing entries result in the owner's capital account being transferred into net income or net loss for the period ending.

Accepted Answer

A) True 
 B)False

Question 5

The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital?   J. Brendon, Capital $112,000 J. Brendon, Withdrawals 32,000 Fest earned 187,000 Depreciation Expense-Equipment 12,000 Wages expense 71,400 Interest expense 3,300 Insurance expense 11,700 Rent expense 24,200\begin{array} { | l | r | } \hline 	ext { J. Brendon, Capital } & \$ 112,000 \\hline 	ext { J. Brendon, Withdrawals } &  3 2 , 0 0 0  \\hline 	ext { Fest earned } & 187,000 \\hline 	ext { Depreciation Expense-Equipment } & 12,000 \\hline 	ext { Wages expense } & 71,400 \\hline 	ext { Interest expense } &  3 , 3 0 0 \\hline 	ext { Insurance expense } & 11,700 \\hline 	ext { Rent expense } & 24,200 \\hline\end{array} J. Brendon, Capital  J. Brendon, Withdrawals  Fest earned  Depreciation Expense-Equipment  Wages expense  Interest expense  Insurance expense  Rent expense ​$112,00032,000187,00012,00071,4003,30011,70024,200​​

Accepted Answer

A)   $80,000.
B)   $32,400.
C)   $42,400.
D)   $43,000.
E)   $64,400. F) D) and E)
G) C) and E)

Question 6

Explain the difference between temporary and permanent accounts.

Accepted Answer

Temporary, or nominal, accounts accumula...

Question 7

Paradise Travel's adjusted trial balance as of the end of its annual accounting period is shown below:

(a) Prepare the necessary closing entries.
(b) Prepare a post-closing trial balance.

Accepted Answer

None...

Question 8

The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following:

Office supplies used during the period, $1,200. Expiration of prepaid rent, $700.
Accrued salaries expense, $500. Depreciation expense, $800.
Accrued service fees receivable, $400.
The Adjusted Trial Balance columns total is:

Accepted Answer

A)   $87,600
B)   $84,000
C)   $80,400.
D)   $85,700
E)   $85,900F) A) and B)
G) B) and D)

Question 9

Which of the following is classified as a current asset?

Accepted Answer

A)   Office supplies.
B)   Patent.
C)   Office equipment.
D)   Land.
E)   Unearned revenue.F) A) and D)
G) B) and D)

Question 10

The following information has been gathered for Major Properties Co. to assist in preparing its year-end adjusting entries at December 31:
(a) The company has earned $2,500 of rental revenue that has not yet been received or recorded.
(b) Major had previously recorded $3,200 of unearned rental revenue. At year-end, $1,500 of this amount has been earned.
(c) Depreciation on equipment for the year is $7,800.
(d) Employees have earned but have not yet been paid $2,750 in salaries.
Identify which of the above accounting adjustment would be reversed assuming Major Properties Co. uses reversing entries.

Accepted Answer

(a) Reversed.
(b) No...

Question 11

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

Accepted Answer

A) True 
 B)False

Question 12

Statements that show the financial statements as if proposed transactions had already occurred are called:

Accepted Answer

A)   Temporary statements.
B)   Interim statements.
C)   Pro forma statements.
D)   Professional statements.
E)   Simplified statements.F) B) and E)
G) B) and D)

Question 13

Normally closing entries are first entered in the general journal and then posted to the work sheet.

Accepted Answer

A) True 
 B)False

Question 14

The steps in the accounting cycle are shown below. List them in the correct order in which they are completed:
Prepare adjusted trial balance 
Post transactions
Prepare an unadjusted trial balance 
Journalize transactions
Prepare the financial statements
 Close the temporary accounts 
Adjust the ledger accounts
Prepare a post-closing trial balance 
Analyze transactions

Accepted Answer

1) Analyze transactions
2) Journalize t...

Question 15

Because it is a necessary financial statement, the work sheet must be prepared according to specified accounting procedures.

Accepted Answer

A) True 
 B)False

Question 16

The current ratio:

Accepted Answer

A)   Is used to help assess a company's ability to pay its debts in the near future.
B)   Is used to measure a company's profitability.
C)   Measures the effect of operating income on profit.
D)   Is used to measure the relation between assets and long-term debt.
E)   Is calculated by dividing current assets by equity.F) A) and B)
G) A) and C)

Question 17

Which of the following errors would cause the Balance Sheet and Statement of Owner's Equity columns of a work sheet to be out of balance?

Accepted Answer

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

Question 18

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) A) and B)
G) C) and D)

Question 19

Flagg records adjusting entries at its December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, at which time $30,000 will be paid. Prepare the journal on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1.

Accepted Answer

A)   Debit Salaries expense $12,000; debit Salaries payable $18,000; credit Cash $30,000.
B)   Debit Salaries expense $18,000, debit Salaries payable $12,000; credit Cash $30,000.
C)   Debit Salaries expense $18,000; credit Cash $18,000.
D)   Debit Salaries payable $30,000; credit Cash $30,000.
E)   Debit Salaries expense $30,000; credit Cash $30,000.F) A) and C)
G) A) and D)

Question 20

Explain the purpose of reversing entries.

Accepted Answer

Reversing entries are an optional step i...

Exam 4: Completing the Accounting Cycle

Correct Answer
verified

Closing entries result in the owner's capital account being transferred into net income or net loss for the period ending.

Correct Answer
verified

Explain the difference between temporary and permanent accounts.

Correct Answer
verified
Temporary, or nominal, accounts accumula...
View Answer

Correct Answer
verified
1) Analyze transactions
2) Journalize t...
View 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 Answer
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Because it is a necessary financial statement, the work sheet must be prepared according to specified accounting procedures.

Correct Answer
verified

Which of the following is classified as a current asset?

Correct Answer
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Correct Answer
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Correct Answer
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(a) Reversed.
(b) No...
View Answer

Paradise Travel's adjusted trial balance as of the end of its annual accounting period is shown below: (a) Prepare the necessary closing entries. (b) Prepare a post-closing trial balance.

Correct Answer
verified
None...
View Answer

In the process of completing a work sheet, the accountant determines that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss) for the period into the work sheet would require an entry to

Correct Answer
verified

Normally closing entries are first entered in the general journal and then posted to the work sheet.

Correct Answer
verified

The usual order for the asset subgroups of a classified balance sheet is:

Correct Answer
verified

Statements that show the financial statements as if proposed transactions had already occurred are called:

Correct Answer
verified

Explain the purpose of reversing entries.

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

Revenues, expenses, withdrawals, and Income Summary are called ________ accounts because they are closed at the end of each accounting period.

Correct Answer
verified
temporary ...
View Answer

Correct Answer
verified

The current ratio:

Correct Answer
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Which of the following errors would cause the Balance Sheet and Statement of Owner's Equity columns of a work sheet to be out of balance?

Correct Answer
verified

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

Correct Answer
verified

Exam 4: Completing the Accounting Cycle

Correct AnswerverifiedShow Answer

Closing entries result in the owner's capital account being transferred into net income or net loss for the period ending.

Correct AnswerverifiedShow Answer

Explain the difference between temporary and permanent accounts.

Correct AnswerverifiedTemporary, or nominal, accounts accumula...View AnswerShow Answer

Correct Answerverified1) Analyze transactions2) Journalize t...View AnswerShow 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

Because it is a necessary financial statement, the work sheet must be prepared according to specified accounting procedures.

Correct AnswerverifiedShow Answer

Which of the following is classified as a current asset?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverified(a) Reversed.(b) No...View AnswerShow Answer

Paradise Travel's adjusted trial balance as of the end of its annual accounting period is shown below: (a) Prepare the necessary closing entries. (b) Prepare a post-closing trial balance.

Correct AnswerverifiedNone...View AnswerShow Answer

In the process of completing a work sheet, the accountant determines that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss) for the period into the work sheet would require an entry to

Correct AnswerverifiedShow Answer

Normally closing entries are first entered in the general journal and then posted to the work sheet.

Correct AnswerverifiedShow Answer

The usual order for the asset subgroups of a classified balance sheet is:

Correct AnswerverifiedShow Answer

Statements that show the financial statements as if proposed transactions had already occurred are called:

Correct AnswerverifiedShow Answer

Explain the purpose of reversing entries.

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

Revenues, expenses, withdrawals, and Income Summary are called ________ accounts because they are closed at the end of each accounting period.

Correct Answerverifiedtemporary ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The current ratio:

Correct AnswerverifiedShow Answer

Which of the following errors would cause the Balance Sheet and Statement of Owner's Equity columns of a work sheet to be out of balance?

Correct AnswerverifiedShow Answer

Current assets and current liabilities are expected to be used up or come due within one year or the company's operating cycle whichever is longer.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Temporary, or nominal, accounts accumula...
View Answer

Correct Answer
verified
1) Analyze transactions
2) Journalize t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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(a) Reversed.
(b) No...
View Answer

Correct Answer
verified
None...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified
temporary ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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