Question 1

A correcting entry

Accepted Answer

A)  must involve one balance sheet account and one income statement account. 
B)  is another name for a closing entry. 
C)  may involve any combination of accounts. 
D)  is a required step in the accounting cycle. 
A)  must involve one balance sheet account and one income statement account. 
B)  is another name for a closing entry. 
C)  may involve any combination of accounts. 
D)  is a required step in the accounting cycle. C

Question 2

Farris Company prepared the following adjusting entries at year end on December 31, 2010:   
In an effort to minimize errors in recording transactions, J. Farris Company utilizes reversing entries. Prepare reversing entries on January 1, 2011.

Accepted Answer

EXERCISES

Question 3

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:   What is the book value of the equipment at December 31, 2010?

Accepted Answer

A)  $218,000 
B)  $190,000 
C)  $162,000 
D)  $150,000 
A)  $218,000 
B)  $190,000 
C)  $162,000 
D)  $150,000 C

Question 4

Current assets are listed in the order of liquidity.

Accepted Answer

A) True 
 B)False

Question 5

The income statement for the year 2010 of Poole Co. contains the following information:   After the revenue and expense accounts have been closed, the balance in Income Summary will be

Accepted Answer

A)  $0. 
B)  a debit balance of $3,500. 
C)  a credit balance of $3,500. 
D)  a credit balance of $70,000. 
A)  $0. 
B)  a debit balance of $3,500. 
C)  a credit balance of $3,500. 
D)  a credit balance of $70,000.

Question 6

The income statement for the year 2010 of Poole Co. contains the following information:   After all closing entries have been posted, the revenue account will have a balance of

Accepted Answer

A)  $0. 
B)  $70,000 credit. 
C)  $70,000 debit. 
D)  $3,500 credit. 
A)  $0. 
B)  $70,000 credit. 
C)  $70,000 debit. 
D)  $3,500 credit.

Question 7

The use of reversing entries

Accepted Answer

A)  is a required step in the accounting cycle. 
B)  changes the amounts reported in the financial statements. 
C)  simplifies the recording of subsequent transactions. 
D)  is required for all adjusting entries. 
A)  is a required step in the accounting cycle. 
B)  changes the amounts reported in the financial statements. 
C)  simplifies the recording of subsequent transactions. 
D)  is required for all adjusting entries.

Question 8

Identify which of the following are temporary accounts of Potter Company.
(1) Potter, Capital
(2) Potter, Drawing
(3) Equipment
(4) Accumulated Depreciation
(5) Depreciation Expense

Accepted Answer

(2) Potter

Question 9

These are selected account balances on December 31, 2010.   What is the total amount of property, plant, and equipment that will appear on the balance sheet?

Accepted Answer

A)  $1,300,000 
B)  $1,100,000 
C)  $1,600,000 
D)  $950,000 
A)  $1,300,000 
B)  $1,100,000 
C)  $1,600,000 
D)  $950,000

Question 10

Indicate the worksheet column (income statement Dr., balance sheet Cr., etc.) to which each of the following accounts would be extended.

Accepted Answer

The answer of Indicate the worksheet column (income statement Dr.,...

Question 11

These financial statement items are for Knight Company at year-end, July 31, 2010.   
Instructions
(a) Prepare an income statement and an owner's equity statement for the year. The owner did not make any new investments during the year..
(b) Prepare a classified balance sheet at July 31.

Accepted Answer

The answer of These financial statement items are for Knight...

Question 12

Each of the following accounts is closed to Income Summary except

Accepted Answer

A)  Expenses. 
B)  Owner's Drawing. 
C)  Revenues. 
D)  All of these are closed to Income Summary. 
A)  Expenses. 
B)  Owner's Drawing. 
C)  Revenues. 
D)  All of these are closed to Income Summary.

Question 13

When using a worksheet, adjusting entries are journalized

Accepted Answer

A)  after the worksheet is completed and before financial statements are prepared. 
B)  before the adjustments are entered on to the worksheet. 
C)  after the worksheet is completed and after financial statements have been prepared. 
D)  before the adjusted trial balance is extended to the proper financial statement columns. 
A)  after the worksheet is completed and before financial statements are prepared. 
B)  before the adjustments are entered on to the worksheet. 
C)  after the worksheet is completed and after financial statements have been prepared. 
D)  before the adjusted trial balance is extended to the proper financial statement columns.

Question 14

To close net income to owner's capital, Income Summary is debited and Owner's Capital is credited.

Accepted Answer

A) True 
 B)False

Question 15

At March 31, account balances after adjustments for Rogers Cinema are as follows:   
Instructions
Prepare the closing journal entries for Rogers Cinema.

Accepted Answer

The answer of At March 31, account balances after adjustments...

Question 16

An error has occurred in the closing entry process if

Accepted Answer

A)  revenue and expense accounts have zero balances. 
B)  the owner's capital account is credited for the amount of net income. 
C)  the owner's drawing account is closed to the owner's capital account. 
D)  the balance sheet accounts have zero balances. 
A)  revenue and expense accounts have zero balances. 
B)  the owner's capital account is credited for the amount of net income. 
C)  the owner's drawing account is closed to the owner's capital account. 
D)  the balance sheet accounts have zero balances.

Question 17

The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  Expenses are closed to the Expense Summary account. 
B)  Only revenues are closed to the Income Summary account. 
C)  Revenues and expenses are closed to the Income Summary account. 
D)  Revenues, expenses, and the owner's drawing account are closed to the Income Summary account. 
A)  Expenses are closed to the Expense Summary account. 
B)  Only revenues are closed to the Income Summary account. 
C)  Revenues and expenses are closed to the Income Summary account. 
D)  Revenues, expenses, and the owner's drawing account are closed to the Income Summary account.

Question 19

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:   What are total current liabilities at December 31, 2010?

Accepted Answer

A)  $18,000 
B)  $70,000 
C)  $88,000 
D)  $0 
A)  $18,000 
B)  $70,000 
C)  $88,000 
D)  $0

Question 20

Which of the following steps in the accounting cycle would not generally be performed daily?

Accepted Answer

A)  Journalize transactions 
B)  Post to ledger accounts 
C)  Prepare adjusting entries 
D)  Analyze business transactions 
A)  Journalize transactions 
B)  Post to ledger accounts 
C)  Prepare adjusting entries 
D)  Analyze business transactions

Exam 4: Completing the Accounting Cycle

A correcting entry

Farris Company prepared the following adjusting entries at year end on December 31, 2010: In an effort to minimize errors in recording transactions, J. Farris Company utilizes reversing entries. Prepare reversing entries on January 1, 2011.

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010: What is the book value of the equipment at December 31, 2010?

Current assets are listed in the order of liquidity.

The income statement for the year 2010 of Poole Co. contains the following information: After the revenue and expense accounts have been closed, the balance in Income Summary will be

The income statement for the year 2010 of Poole Co. contains the following information: After all closing entries have been posted, the revenue account will have a balance of

The use of reversing entries

Identify which of the following are temporary accounts of Potter Company. (1) Potter, Capital (2) Potter, Drawing (3) Equipment (4) Accumulated Depreciation (5) Depreciation Expense

These are selected account balances on December 31, 2010. What is the total amount of property, plant, and equipment that will appear on the balance sheet?

Indicate the worksheet column (income statement Dr., balance sheet Cr., etc.) to which each of the following accounts would be extended.

These financial statement items are for Knight Company at year-end, July 31, 2010. Instructions (a) Prepare an income statement and an owner's equity statement for the year. The owner did not make any new investments during the year.. (b) Prepare a classified balance sheet at July 31.

Each of the following accounts is closed to Income Summary except

When using a worksheet, adjusting entries are journalized

To close net income to owner's capital, Income Summary is debited and Owner's Capital is credited.

At March 31, account balances after adjustments for Rogers Cinema are as follows: Instructions Prepare the closing journal entries for Rogers Cinema.

An error has occurred in the closing entry process if

The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns.

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

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010: What are total current liabilities at December 31, 2010?

Which of the following steps in the accounting cycle would not generally be performed daily?

Accounting in Action

The Recording Process

Adjusting the Accounts

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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