Exam 4: Completing the Accounting Cycle

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 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 Equipment 210,000 What is the company's net income for the year ending December 31, 2015?

If a worksheet is used, financial statements can be prepared before adjusting entries are journalized.

The most important information needed to determine if companies can pay their current obligations is the

A lawyer collected $710 of legal fees in advance. He erroneously debited Cash for $170 and credited Accounts Receivable for $170. The correcting entry is a. Cash $\quad$$\quad$ 170 $\quad$ Accounts Receivable $\quad$$\quad$ 540 $\quad$$\quad$ Unearned Service Revenue. $\quad$$\quad$ 710 b. Cash $\quad$$\quad$ 710 $\quad$ Service Revenue $\quad$$\quad$ 710 c. Cash $\quad$$\quad$ 540 $\quad$ Accounts Receivable $\quad$$\quad$ 170 $\quad$$\quad$ Unearned Service Revenue. $\quad$$\quad$ 710 d. Cash $\quad$$\quad$ 540 $\quad$ Accounts Receivable $\quad$$\quad$ 540

The purpose of the post-closing trial balance is to

In a corporation, Retained Earnings is a part of stockholders' equity.

The following information is for Sunny Day Real Estate: Sunny Day Real Estate Balance Sheet December 31, 2015 Cash \ 25,000 Accounts Payable \ 60,000 Prepaid Insurance 30,000 Salaries and Wages Payable 15,000 Accounts Receivable 50,000 Mortqage Payable 85,000 Inventory 70,000 Total Liabilities 160,000 Land Held for Investment 85,000 Land 120,000 Buildings \ 100,000 Common Stock \ 120,000 Less Accumulated Retained Earnings 250,000 370,000 Trademark 70,000 Total Liabilities and Total Assets \ 530,000 Stockholders' Equity \ 530,000 The total dollar amount of assets to be classified as property, plant, and equipment is

The steps in the preparation of a worksheet do not include

Which one of the following is usually performed only at the end of a company's annual accounting period?

The post-closing trial balance contains only

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

Income Summary has a credit balance of $17,000 in S. Sufjan Co. after closing revenues and expenses. The entry to close Income Summary is

The following information is for Sunny Day Real Estate: Sunny Day Real Estate Balance Sheet December 31, 2015 Cash \ 25,000 Accounts Payable \ 60,000 Prepaid Insurance 30,000 Salaries and Wages Payable 15,000 Accounts Receivable 50,000 Mortqage Payable 85,000 Inventory 70,000 Total Liabilities 160,000 Land Held for Investment 85,000 Land 120,000 Buildings \ 100,000 Common Stock \ 120,000 Less Accumulated Retained Earnings 250,000 370,000 Trademark 70,000 Total Liabilities and Total Assets \ 530,000 Stockholders' Equity \ 530,000 The total dollar amount of assets to be classified as investments is

The income statement for the year 2015 of Fugazi Co. contains the following information: $\begin{array}{lr}\text { Revenues }&&\$70,000\\\text { Expenses: }\\\text { Salaries and Wages Expense } & \$ 45,000 \\\text { Rent Expense } & 12,000 \\\text { Advertising Expense } & 10,000 \\\text { Supplies Expense } & 6,000 \\\text { Utilities Expense } & 2,500 \\\text { Insurance Expense } & 2,000 \\\text { Total expenses }&&77,500\\\text { Net income (loss) }&&\$(7,500)\end{array}$ The entry to close the expense accounts includes a

Each of the following accounts is closed to Income Summary except

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 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 Equipment 210,000 What is the amount that would be reported for stockholders' equity at December 31, 2015?

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:

Closing entries are

The step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is

Which of the following depicts the proper sequence of steps in the accounting cycle?