Exam 4: Completing the Accounting Cycle

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

The first item listed under current liabilities is usually

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

Balance sheet accounts are considered to be

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

IFRS requires the use of

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: 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 6/30/16 70,000 Prepaid insurance (12-month policy) 6,000 Rent expense 17,000 Retained earnings (1/1/15) 60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 What is total liabilities and stockholders' equity at December 31, 2015?

The income statement for the year 2015 of Fugazi Co. contains the following information: $\begin{array}{lr}\text { Revenues }&&\$70,000\\\text { Expenses: }\\\text { Salaries and Wages Expense } & \$ 45,000 \\\text { Rent Expense } & 12,000 \\\text { Advertising Expense } & 10,000 \\\text { Supplies Expense } & 6,000 \\\text { Utilities Expense } & 2,500 \\\text { Insurance Expense } & 2,000 \\\text { Total expenses }&&77,500\\\text { Net income (loss) }&&\$(7,500)\end{array}$ At January 1, 2015, Fugazi reported retained earnings of $50,000. Dividends for the year totalled $10,000. At December 31, 2015, the company will report retained earnings of

Which of the following liabilities are not related to the operating cycle?

If errors occur in the recording process, they

Intangible assets are

The worksheet does not show

Which of the following is a true statement about closing the books of a corporation?

The final step in the accounting cycle is to prepare

An intangible asset

Which of the following is an optional step in the accounting cycle?

A post-closing trial balance should be prepared

The final closing entry to be journalized is typically the entry that closes the

Under IFRS

Current liabilities are obligations that the company is to pay within the coming year.