Exam 4: Completing the Accounting Cycle

The closing entry process consists of closing

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

The following information is for Bright Eyes Auto Supplies: Bright Eyes Auto Supplies Balance Sheet December 31, 2015 Cash \ 40,000 Accounts Payable \ 130,000 Prepaid Insurance 80,000 Salaries and Wages Payable 50,000 Accounts Receivable 100,000 Mortgage Payable 150,000 Inventory 140,000 Total Liabilities 330,000 Land Held for Investment 180,000 Land 250,000 Buildings \ 200,000 Common Stock \ 400,000 Less Accumulated Retained Earnings 340,000 740,000 Depreciation (60,000) 140,000 Trademark 140,000 Total Liabilities and Total Assets \1 ,070,000 Stockholders' Equity \1 ,070,000 The total dollar amount of assets to be classified as property, plant, and equipment is

Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is a. Salaries and Wages Payable $\quad$$\quad$ 27,000 $\quad$$\quad$ Cash $\quad$$\quad$ 27,000 b. Cash $\quad$$\quad$ 27,000 $\quad$$\quad$ Salaries and Wages Expense. $\quad$$\quad$ 27,000 c. Salaries and Wages Payable $\quad$$\quad$ 27,000 $\quad$$\quad$ Salaries and Wages Expense. $\quad$$\quad$ 27,000 d. Cash $\quad$$\quad$ 27,000 $\quad$$\quad$ Salaries and Wages Expense $\quad$$\quad$ 27,000

A post-closing trial balance will show

The income statement for the month of June, 2015 of Camera Obscura Enterprises contains the following information: Revenues \7 ,000 Expenses: Salaries and Wages Expense \ 3,000 Rent Expense 1,500 Advertising Expense 800 Supplies Expense 300 Insurance Expense 100 Total expenses 5,700 Net income \1 ,300 The entry to close the revenue account includes a

All of the following are stockholders' equity accounts except

The accounting cycle begins at the start of a new accounting period.

A company's operating cycle and fiscal year are usually the same length of time.

After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the

A current asset is

If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a

Correcting entries are made

The most efficient way to accomplish closing entries is to

The account, Supplies, will appear in the following debit columns of the worksheet.

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 are total long-term liabilities at December 31, 2015?

The balance in the income summary account before it is closed will be equal to

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 income statement for the year 2015 of Fugazi Co. contains the following information: $\begin{array}{lr}\text { Revenues }&&\$70,000\\\text { Expenses: }\\\text { Salaries and Wages Expense } & \$ 45,000 \\\text { Rent Expense } & 12,000 \\\text { Advertising Expense } & 10,000 \\\text { Supplies Expense } & 6,000 \\\text { Utilities Expense } & 2,500 \\\text { Insurance Expense } & 2,000 \\\text { Total expenses }&&77,500\\\text { Net income (loss) }&&\$(7,500)\end{array}$ After all closing entries have been posted, the Income Summary account will have a balance of

All of the following are property, plant, and equipment except