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Exam 4: The Accounting Cycle

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Question 81

True/False

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

A) True
B) False

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Question 82

Multiple Choice

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After posting the second closing entry to the income summary account, the balance will be equal to

A) zero
B) stockholders' equity
C) revenues for the period
D) the net income or net loss for the period

E) None of the above
F) C) and D)

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Question 83

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Kirk Enterprises offers rug cleaning services to business clients. Below is the adjustments data for the year ended July 31. Using this information along with the spreadsheet below, record the adjusting entries in proper general journal form. Adjustments: (a) Depreciation expense, $1,000. (b) Wages accrued, but not paid, $2,000. (c) Supplies on hand, $8,000. (d) Of the unearned revenue, 75% has been earned. (e) Unexpired insurance at July 31, $9,000. ​

Zeta Company has 12 workers who each earn $15 per hour and generally work a 40-hour workweek, although at times overtime work is required, for which workers are paid 1.5 times their regular hourly wage. Zeta pays wages in cash on Friday of each week for work performed that week. Zeta's Wages Expense ledger account for May is shown below. ​ ​ During the period May 27 through June 2, Zeta's workers worked a regular 40-hour week. 1. If Zeta Company uses reversing entries, journalize the entry made when payroll is paid in cash on June 2, assuming that appropriate reversing entry(ies) have been made at the beginning of June. You may omit posting references. 2. If Zeta Company does not use reversing entries, journalize the entry made when payroll is paid in cash on June 2. You may omit posting references.

A post-closing trial balance should be prepared before the financial statements are prepared.

On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount.

The Income Statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520. What does this information mean to the accountant?

Assets, liabilities, and stockholders' equity accounts are real accounts and do not get closed at the end of the period.

The end-of-period spreadsheet

Which of the items below does not appear on the end-of-period spreadsheet?

Calculate the current ratio for each business below. Which business has the best short-term solvency position given your calculations? ​

The income statement will present

Use the adjusted trial balance for Stockton Company below to answer the questions that follow. ​ -Determine the retained earnings ending balance.

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

Which of the statements below indicates that a company earned a net income for the period?

Alpha Company has current assets of $74,524, total assets of $203,310, total net income of $67,913, current liabilities of $60,100, and total liabilities of $150,600. ​ What is Alpha Company's working capital?

Use this end-of-period spreadsheet to answer the questions that follow. ​ ​ ​ -The entry to close expenses would be

The last step of the accounting cycle is to prepare a post-closing trial balance.

The end-of-period spreadsheet is a tool that accountants can use to summarize adjusting entries and the account balances for the financial statements.

The closing process is sometimes referred to as closing the books.