Exam 4: Completing the Accounting Cycle

The following is the adjusted trial balance for Nadia Company.​ Prepare an income statement, statement of owner's equity, and balance sheet. Assume that the capital account started with a beginning balance of $10,000 and that the owner made an additional investment of $3,000 during the period.

Financial statements should be prepared before the closing entries are journalized and posted.

The ability of a business to pay its debts is called solvency.

The following data were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30, for Abigail Company:​ Prepare a classified balance sheet.

A fiscal year that ends when business activities have reached their lowest point is called the natural business year.

An end-of-period spreadsheet includes columns for

Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts.

Which of the following has steps of the accounting cycle in proper sequence (some steps may be missing)?

Accrued revenues are ordinarily listed on the balance sheet as current liabilities.

The statement of owner's equity begins with the beginning balance followed by

Any 12-month accounting period adopted by a company is known as its fiscal year.

Which of the accounts below would be closed by posting a debit to the account?

Use the adjusted trial balance for Stockton Company to answer the questions that follow. ? Stockton Company Adjusted Trial Balance December 31 Account No. Debit Balances Credit Balances Cash 11 6,530 Accounts Receivable 12 2,100 Prepaid Expenses 13 700 Equipment 18 13,700 Accumulated Depreciation 19 1,100 Accounts Payable 21 1,900 Notes Payable 22 4,300 Bob Steely, Capital 31 12,940 Bob Steely, Drawing 32 790 Fees Earned 41 9,250 Wages Expense 51 2,500 Rent Expense 52 1,960 Utilities Expense 53 775 Depreciation Expense 54 250 Miscellaneous Expense 59 \_\_\_\_\_ Totals -Use the adjusted trial balance for Stockton Company. Determine the total liabilities for the period.

Current assets and current liabilities for Brayden Company are as follows:?? 209 208 Current Assets \ 498,600 \ 532,400 Current Liabilities 269,300 301,500 The change in the current ratio from 20Y8 to 20Y9 was favorable.

Indicate whether each of the following would be reported in the section of financial statements identified as (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense:

The following revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co. for December 31:? Prepare an income statement.

On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 for Banes Domino's Company, journalize the closing entries.

Complete the following end-of-period spreadsheet for Danilo Enterprises.

Prior to adjustment at August 31, Salary Expense has a debit balance of $298,500. Salaries owed but not paid as of the same date total $4,200.Present the entries to record the following: (1)Accrued salaries as of August 31. (2)Closing of Salary Expense as of August 31.

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should flow to (a) the income statement, (b) the statement of owner's equity, or (c) the balance sheet.