Exam 4: Completing the Accounting Cycle

Intangible assets are customarily the first items listed on a classified statement of financial position.

Correcting entries

Match the items below by entering the appropriate code letter in the space provided.

If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income.

The following items are taken from the adjusted trial balance of Highlander Company for the month ending July 31, 2014: Prepare the current assets section of Highlander's classified statement of financial position.

The first item listed under current liabilities is usually

The following items (in thousands) are taken from the financial statements of Huang Company for the year ending December 31, 2014: What is the company's net income for the year ending December 31, 2014?

Under Protection provides underground storage facilities for companies desiring off-site storage of sensitive documents, computer records, and other items. They have developed a sophisticated surveillance and security system which they initially used in their own facilities, and have recently started to market elsewhere as well. The underground storage facilities are made from natural caves in some instances (reinforced and modified as appropriate) and from excavations of natural rock formations in others. The land was purchased over ten years ago for a total of $2.5 million. The modifications have cost approximately $15 million more. The company has never depreciated its storage facilities because the market value of the property has continued to rise. Presently, the market price is between $30 and $40 million. Joe Goll, a new accounting manager, questioned this depreciation policy. Tim North, the controller, has told him that he needn't worry about it. For one thing, he says, this is really a special form of Land account, which should not be depreciated at all. For another, this is a privately held company, and so they don't need to worry about misleading investors. All the owners know about and approve the depreciation policy. Required: What are the ethical issues in this situation?

The account balances appearing in the adjusted trial balance columns are extended to the ______________ columns and the ______________ columns.

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

A double rule applied to accounts in the ledger during the closing process implies that

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

On a classified statement of financial position, current assets are customarily listed

On May 25, Carlin Company received a $550 check from Andy Jeter for services to be performed in the future. The bookkeeper for Carlin Company incorrectly debited Cash for $550 and credited Accounts Receivable for $550. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

IFRS requires that current assets be reported on the statement of financial position in the order of their liquidity.

Farr Company paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $50,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $30,000 had been accrued at year end on December 31. The correcting entry is

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?

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

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

The worksheet for Boone Mailing Center appears below. Using the adjustment data below, complete the worksheet. Add any accounts that are necessary. Adjustment data: (a) Prepaid rent expired during August, $2. (b) Depreciation expense on equipment for the month of August, $8. (c) Supplies on hand on August 31 amounted to $4. (d) Salaries and wages expense incurred at August 31 but not yet paid amounted to $12.