Exam 4: Completion of the Accounting Cycle

On August 1, Rothesay Boat Club provided services on account for $800. Rothesay received the entire balance on August 31 and recorded the payment by debiting Cash for $800 and crediting Service Revenue for $800. On the August 31 financial statements

When all columns are in balance, the preparation of a work sheet will help ensure that no errors were made in the accounting records.

Closing entries are

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

Which of the following is an example of a temporary account that will be closed to Income Summary at the end of the accounting period?

It is NOT necessary to prepare formal financial statements if a work sheet has been prepared because financial position and profit are shown on the work sheet.

After closing entries are posted, the balance in the Owner's Capital account in the ledger will be equal to

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.

Closing entries are an optional part of the accounting cycle.

Reversing entries are used to reverse accrued revenues and expenses.

Reversing entries are more relevant in corporations.

The account used to temporarily hold the profit or loss before being transferred to the capital account is called

Current assets are normally listed in the balance sheet in order of permanency.

Reversing entries are used to reverse two type of adjusting entries:

Crimmins Boats paid a $350 cheque to a supplier for the balance due on an account payable. The transaction was erroneously recorded as a credit to Cash of $530 and a debit to Repairs Expense of $530. The correcting entry is

Reversing entries are useful

An intangible asset

If a company utilizes reversing entries, they will

If errors occur in the recording process, they

A company has only one accounting cycle over its economic existence.