Exam 4: Completing the Accounting Cycle

On May 25, Yellow House Company received a $650 check from Grizzly Bean for services to be performed in the future. The bookkeeper for Yellow House Company incorrectly debited Cash for $650 and credited Accounts Receivable for $650. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

It is not true that current assets are assets that a company expects to

Wakefield Company discovered the following errors made in January 2018. 1. A payment of salaries expense of $900 was debited to Equipment and credited to Cash, both for $900. 2. A collection of $2,000 from a client on account was debited to Cash $200 and credited to Service Revenue $200. 3. The purchase of equipment on account for $680 was debited to Equipment $860 and credited to Accounts Payable $860. Instructions Correct the errors by reversing the incorrect entry and preparing the correct entry.

Use the following income statement for the year 2018 for Belle Company to prepare entries to close the revenue and expense accounts for the company.

Which of the following steps in the accounting cycle would not generally be performed daily?

These are selected account balances on December 31, 2018. Land (location of the office building) \ 100,000 Land (held for future use) 150,000 Office Building 700,000 Inventory 200,000 Equipment 450,000 Office Furniture 150,000 Accumulated Depreciation 425,000 What is the total amount of property, plant, and equipment that will appear on the balance sheet?

The following selected account balances appear on the December 31, 2018 balance sheet of Superchunk Co. Land (location of the office building) \ 150,000 Land (held for future use) 225,000 Office Building 800,000 Inventory 300,000 Equipment 675,000 Office Furniture 225,000 Accumulated Depreciation 640,000 What is the total amount of property, plant, and equipment that will be reported on the balance sheet?

Journalizing and posting closing entries is a required step in the accounting cycle. Discuss why it is necessary to close the books at the end of an accounting period. If closing entries were not made, how would the preparation of financial statements be affected?

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

Intangible assets include each of the following except

On March 8, Black Candy Company bought supplies on account from the Arcade Fire Company for $550. Black Candy Company incorrectly debited Equipment for $500 and credited Accounts Payable for $500. The entries have been posted to the ledger. the correcting entry should be:

It is not necessary to prepare formal financial statements if a worksheet has been prepared because financial position and net income are shown on the worksheet.

The income statement for the year 2018 of Fugazi Co. contains the following information: Revenues \7 0,000 Expenses: Salaries and Wages Expense \ 45,000 Rent Expense 12,000 Advertising Expense 10,000 Supplies Expense 6,000 Utilities Expense 2,500 Insurance Expense 2,000 Total expenses 77,500 Net income \7 ,500 After all closing entries have been posted, the revenue account will have a balance of

Which statement about long-term investments is not true?

The adjustments columns of the worksheet for Mandy Company are shown below. Instructions (a) Prepare the adjusting entries. (b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial statement column to which each balance should be extended.

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as property, plant, and equipment is

Equipment is classified in the balance sheet as

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018: Accounts payable 18,000 Accounts receivable 11,000 Accumulated depreciation - equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Equipment 210,000 Insurance expense 3,000 Note payable, due 6/30/19 70,000 Prepaid insurance (12-month policy) 6,000 Rent expense 17,000 Retained earnings (1/1/18) 60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 The sub-classifications for assets on the company's classified balance sheet would include all of the following except