Exam 4: Completing the Accounting Cycle

At Westglow Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the necessary correcting entry for each of the following. a. A collection on account of ₤500 was debited to Cash €500 and credited to Service Revenue ₤500. b. The purchase of supplies on account for ₤1,270 was recorded as a debit to Supplies for ₤1,720 and a credit to Accounts Payable for ₤1,720.

The closing entry process consists of closing

Which one of the following statements concerning the accounting cycle is incorrect?

A liability is classified as a current liability if the company is to pay it within the forthcoming year.

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 20114: What are total non-current liabilities at December 31, 20114?

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?

Companies that use GAAP

The last 2 columns on a worksheet prepared under IFRS contains data for the Retained Earnings Statements.

Identify which of the following accounts would have balances on a post-closing trial balance. (1) Service Revenue (2) Income Summary (3) Notes Payable (4) Interest Expense (5) Cash

The preparation of a Statement of Financial Position is a required step in the accounting cycle.

Use the following data, taken from the adjusted trial balance, for 70 and 71. -Which of the following accounts is least likely to have its balance change on the worksheet?

The following information (in thousands) is for Zháng Office Supplies: The total amount of liabilities to be classified as current liabilities is

Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.

After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to

A lawyer collected $630 of legal fees in advance. He erroneously debited Cash for $360 and credited Accounts Receivable for $360. The correcting entry is

Reversing entries are an optional bookkeeping procedure.

An error has occurred in the closing entry process if

The following accounts were included on Haircut 101's adjusted trial balance at December 31, 2014: (a) What are total current assets? (b) What are total current liabilities?

Closing entries may be prepared from all but which one of the following sources?