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Exam 3: Adjusting Accounts for Financial Statements

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Question 131

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A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The company paid $8,000 cash in dividends to the owner (sole shareholder) . Which of the following entries could not be a closing entry?

A) Debit Income Summary $13,000; credit Retained Earnings $13,000.
B) Debit Income Summary $75,000; credit Revenues $75,000.
C) Debit Revenues $75,000; credit Income Summary $75,000.
D) Debit Income Summary $62,000; credit Expenses $62,000.
E) Debit Retained Earnings $8,000; credit Dividends $8,000.

F) C) and D)
G) A) and C)

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Question 132

Multiple Choice

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Which of the following accounts showing a balance on the post-closing trial balance indicate an error?

A) Office Equipment.
B) Accumulated Depreciation-Office Equipment.
C) Depreciation Expense-Office Equipment.
D) Retained Earnings.
E) Salaries Payable.

F) B) and D)
G) C) and D)

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Question 133

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Cleaver Corporation has determined that the annual depreciation amount on its equipment is $7,100. The correct adjusting entry to record the depreciation for the period is:

Intangible assets are long-term resources that benefit business operations, usually lack physical form and have uncertain benefits.

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

Show the December 31 adjusting entry to record $750 of earned but unpaid salaries of employees at the end of the current accounting period.

Financial statements can be prepared directly from the information in the adjusted trial balance.

Torsten had total assets of $149,501,000, net income of $6,242,000, and net sales of $209,203,000. Its profit margin was 2.98%. Profit Margin = Net Income/Net Sales Profit Margin = $6,242,000/$209,203,000 = 2.98%

Using the information presented below, prepare an income statement from the adjusted trial balance of Dodson Containers Inc.

Use the following partial work sheet from Carmelo Bowl, Inc. to prepare its income statement, statement of retained earnings and a classified balance sheet (Assume the stockholders did not make any investments in the business this year.)

A company had $7,000,000 in net income for the year. Its net sales were $15,200,000 for the same period. Calculate its profit margin.

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

A classified balance sheet:

On the work sheet, net income is entered in the Income Statement Credit column as well as the Balance Sheet Credit column.

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

An _______________________ is a listing of all of the accounts in the ledger with their account balances after adjustments are made.

The ___________________ account is a temporary account used only in the closing process.

Another name for a temporary account is a(n) :

On December 31, 2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is:

The Retained Earnings 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 dividends are $9,000. What is the correct closing entry for the expense accounts?