Question 1

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

Accepted Answer

A)  the net income or loss on the income statement. 
B)  the beginning balance in the owner's capital account. 
C)  the ending balance in the owner's capital account. 
D)  zero. 
A)  the net income or loss on the income statement. 
B)  the beginning balance in the owner's capital account. 
C)  the ending balance in the owner's capital account. 
D)  zero.

Question 2

Correcting entries are made

Accepted Answer

A)  at the beginning of an accounting period. 
B)  at the end of an accounting period. 
C)  whenever an error is discovered. 
D)  after closing entries. 
A)  at the beginning of an accounting period. 
B)  at the end of an accounting period. 
C)  whenever an error is discovered. 
D)  after closing entries.

Question 3

A company's liquidity is concerned with the relationship between long-term investments and long-term debt.

Accepted Answer

A) True 
 B)False

Question 4

The income statement of Yoakum's Shoe Repair is as follows:   
On April 1, the owner, Sam Yoakum, had a capital balance of $12,900. During April, Yoakum withdrew $3,000 cash for personal use.
Instructions
(a) Prepare closing entries at April 30.
(b) Prepare an owner's equity statement for the month of April.

Accepted Answer

The answer of The income statement of Yoakum's Shoe Repair...

Question 5

Identify which of the following accounts would appear in a post-closing trial balance.
Accumulated Depreciation Johnson, Drawing
Depreciation Expense Service Revenue
Interest Payable Store Equipment

Accepted Answer

The following accounts would a

Question 6

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:   The current assets should be listed on Dinkel's balance sheet in the following order:

Accepted Answer

A)  cash, accounts receivable, prepaid insurance, equipment. 
B)  cash, prepaid insurance, supplies, accounts receivable. 
C)  cash, accounts receivable, prepaid insurance, supplies. 
D)  equipment, supplies, prepaid insurance, accounts receivable, cash. 
A)  cash, accounts receivable, prepaid insurance, equipment. 
B)  cash, prepaid insurance, supplies, accounts receivable. 
C)  cash, accounts receivable, prepaid insurance, supplies. 
D)  equipment, supplies, prepaid insurance, accounts receivable, cash.

Question 7

Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

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?

Accepted Answer

A)  They should be inserted in alphabetical order into the trial balance accounts already given. 
B)  They should be inserted in chart of account order into the trial balance already given. 
C)  They should be inserted on the lines immediately below the trial balance totals. 
D)  They should not be inserted on the trial balance until the next accounting period. 
A)  They should be inserted in alphabetical order into the trial balance accounts already given. 
B)  They should be inserted in chart of account order into the trial balance already given. 
C)  They should be inserted on the lines immediately below the trial balance totals. 
D)  They should not be inserted on the trial balance until the next accounting period.

Question 9

The balances that appear on the post-closing trial balance will match the

Accepted Answer

A)  income statement account balances after adjustments. 
B)  balance sheet account balances after closing entries. 
C)  income statement account balances after closing entries. 
D)  balance sheet account balances after adjustments. 
A)  income statement account balances after adjustments. 
B)  balance sheet account balances after closing entries. 
C)  income statement account balances after closing entries. 
D)  balance sheet account balances after adjustments.

Question 10

Tom Duran, CPA, was asked by Mike Gore to review the accounting records and prepare the financial statements for his upholstering shop. Tom reviewed the records and found three errors.
1. Cash paid on accounts payable for $930 was recorded as a debit to Accounts Payable $390 and a credit to Cash $390.
2. The purchase of supplies on account for $500 was debited to Equipment $500 and credited to Accounts Payable $500.
3. Mike withdrew $1,200 of cash and the bookkeeper debited Accounts Receivable for $120 and credited Cash $120.
Instructions
Prepare an analysis of each error showing the
(a) incorrect entry.
(b) correct entry.
(c) correcting entry.

Accepted Answer

The answer of Tom Duran, CPA, was asked by Mike...

Question 11

The adjustments entered in the adjustments columns of a worksheet are

Accepted Answer

A)  not journalized. 
B)  posted to the ledger but not journalized. 
C)  not journalized until after the financial statements are prepared. 
D)  journalized before the worksheet is completed. 
A)  not journalized. 
B)  posted to the ledger but not journalized. 
C)  not journalized until after the financial statements are prepared. 
D)  journalized before the worksheet is completed.

Question 12

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

Accepted Answer

A)  Income statement columns 
B)  Adjustments columns 
C)  Trial balance columns 
D)  Adjusted trial balance columns 
A)  Income statement columns 
B)  Adjustments columns 
C)  Trial balance columns 
D)  Adjusted trial balance columns

Question 13

The operating cycle of a company is determined by the number of years the company has been operating.

Accepted Answer

A) True 
 B)False

Question 14

The following items were taken from the financial statements of N. Richman Company. (All dollars are in thousands.)   
Instructions
Prepare a classified balance sheet in good form as of December 31, 2010.

Accepted Answer

The answer of The following items were taken from the...

Question 15

After a worksheet has been completed, the statement columns contain all data that are required for the preparation of financial statements.

Accepted Answer

A) True 
 B)False

Question 16

All of the following statements about the post-closing trial balance are correct except it

Accepted Answer

A)  shows that the accounting equation is in balance. 
B)  provides evidence that the journalizing and posting of closing entries have been properly completed. 
C)  contains only permanent accounts. 
D)  proves that all transactions have been recorded. 
A)  shows that the accounting equation is in balance. 
B)  provides evidence that the journalizing and posting of closing entries have been properly completed. 
C)  contains only permanent accounts. 
D)  proves that all transactions have been recorded.

Question 17

The Income Summary account is an important account that is used

Accepted Answer

A)  during interim periods. 
B)  in preparing adjusting entries. 
C)  annually in preparing closing entries. 
D)  annually in preparing correcting entries. 
A)  during interim periods. 
B)  in preparing adjusting entries. 
C)  annually in preparing closing entries. 
D)  annually in preparing correcting entries.

Question 18

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

Accepted Answer

A)  $0 
B)  $70,000 
C)  $88,000 
D)  $90,000 
A)  $0 
B)  $70,000 
C)  $88,000 
D)  $90,000

Question 19

Correcting entries

Accepted Answer

A)  always affect at least one balance sheet account and one income statement account. 
B)  affect income statement accounts only. 
C)  affect balance sheet accounts only. 
D)  may involve any combination of accounts in need of correction. 
A)  always affect at least one balance sheet account and one income statement account. 
B)  affect income statement accounts only. 
C)  affect balance sheet accounts only. 
D)  may involve any combination of accounts in need of correction.

Question 20

At April 1, 2010, Gardner Company reported a balance of $22,000 in the Gardner, Capital account. Gardner Company earned revenues of $50,000 and incurred expenses of $32,000 during April 2010. The company had owner drawings of $10,000 during the month.
(a) Prepare the entries to close Income Summary and the Gardner, Drawing acccount at April 30, 2010.
(b) What is the balance in Gardner, Capital on the April 30, 2010 post-closing trial balance?

Accepted Answer

@#IMG-DLM& (b) $22,0

Exam 4: Completing the Accounting Cycle

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

Correcting entries are made

A company's liquidity is concerned with the relationship between long-term investments and long-term debt.

Identify which of the following accounts would appear in a post-closing trial balance. Accumulated Depreciation Johnson, Drawing Depreciation Expense Service Revenue Interest Payable Store Equipment

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010: The current assets should be listed on Dinkel's balance sheet in the following order:

Long-term investments would appear in the property, plant, and equipment section of the balance sheet.

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 balances that appear on the post-closing trial balance will match the

The adjustments entered in the adjustments columns of a worksheet are

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

The operating cycle of a company is determined by the number of years the company has been operating.

The following items were taken from the financial statements of N. Richman Company. (All dollars are in thousands.) Instructions Prepare a classified balance sheet in good form as of December 31, 2010.

After a worksheet has been completed, the statement columns contain all data that are required for the preparation of financial statements.

All of the following statements about the post-closing trial balance are correct except it

The Income Summary account is an important account that is used

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

Correcting entries

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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