Question 1

Closing the drawing account to Capital is not necessary if net income is greater than owner's drawings during the period.

Accepted Answer

A) True 
 B)False

Question 2

The following accounts were included on Megan's Style Consultants adjusted trial balance at December 31, 2010:   
(a) What are total current assets?
(b) What are total current liabilities?

Accepted Answer

(a) $5,500 + $11,000

Question 3

If the total debits exceed total credits in the balance sheet columns of the worksheet, owner's equity

Accepted Answer

A)  will increase because net income has occurred. 
B)  will decrease because a net loss has occurred. 
C)  is in error because a mistake has occurred. 
D)  will not be affected. 
A)  will increase because net income has occurred. 
B)  will decrease because a net loss has occurred. 
C)  is in error because a mistake has occurred. 
D)  will not be affected.

Question 4

Prepare the necessary correcting entry for each of the following.
a. A payment of $5,000 for salaries was recorded as a debit to Supplies Expense and a credit to Cash.
b. A purchase of supplies on account for $1,000 was recorded as a debit to Equipment and a credit to Accounts Payable.

Accepted Answer

The answer of Prepare the necessary correcting entry for each...

Question 5

The following lettered items represent a classification scheme for a balance sheet, and the numbered items represent accounts found on balance sheets. In the blank next to each account, write the letter indicating to which category it belongs.
A. Current assets E. Current liabilities
B. Long-term investments F. Long-term liabilities
C. Property, plant, and equipment G. Owner's equity
D. Intangible assets H. Not on the balance sheet
_____ 1. Accumulated Depreciation _____ 6. Inventory
_____ 2. Jones, Capital _____ 7. Patents
_____ 3. Interest Expense _____ 8. Prepaid Rent
_____ 4. Salary Payable _____ 9. Mortgage Payable
_____ 5. Jones, Drawing _____ 10. Land Held for Investment

Accepted Answer

1. C 6. A
2. G 7. D

Question 6

An intangible asset

Accepted Answer

A)  does not have physical substance, yet often is very valuable. 
B)  is worthless because it has no physical substance. 
C)  is converted into a tangible asset during the operating cycle. 
D)  cannot be classified on the balance sheet because it lacks physical substance. 
A)  does not have physical substance, yet often is very valuable. 
B)  is worthless because it has no physical substance. 
C)  is converted into a tangible asset during the operating cycle. 
D)  cannot be classified on the balance sheet because it lacks physical substance.

Question 7

The heading for a post-closing trial balance has a date line that is similar to the one found on

Accepted Answer

A)  a balance sheet. 
B)  an income statement. 
C)  an owner's equity statement. 
D)  the worksheet. 
A)  a balance sheet. 
B)  an income statement. 
C)  an owner's equity statement. 
D)  the worksheet.

Question 8

Closing entries are journalized and posted

Accepted Answer

A)  before the financial statements are prepared. 
B)  after the financial statements are prepared. 
C)  at management's discretion. 
D)  at the end of each interim accounting period. 
A)  before the financial statements are prepared. 
B)  after the financial statements are prepared. 
C)  at management's discretion. 
D)  at the end of each interim accounting period.

Question 9

The worksheet does not show

Accepted Answer

A)  net income or loss for the period. 
B)  revenue and expense account balances. 
C)  the ending balance in the owner's capital account. 
D)  the trial balance before adjustments. 
A)  net income or loss for the period. 
B)  revenue and expense account balances. 
C)  the ending balance in the owner's capital account. 
D)  the trial balance before adjustments.

Question 10

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:   What is total liabilities and owner's equity at December 31, 2010?

Accepted Answer

A)  $176,000 
B)  $190,000 
C)  $218,000 
D)  $232,000 
A)  $176,000 
B)  $190,000 
C)  $218,000 
D)  $232,000

Question 11

Prepare the necessary closing entries based on the following selected accounts.

Accepted Answer

The answer of Prepare the necessary closing entries based on...

Question 12

A business entity has only one accounting cycle over its economic existence.

Accepted Answer

A) True 
 B)False

Question 13

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

Accepted Answer

A)  earned net income for the period. 
B)  an error because debits do not equal credits. 
C)  suffered a net loss for the period. 
D)  to make an adjusting entry. 
A)  earned net income for the period. 
B)  an error because debits do not equal credits. 
C)  suffered a net loss for the period. 
D)  to make an adjusting entry.

Question 14

Intangible assets are

Accepted Answer

A)  listed under current assets on the balance sheet. 
B)  not listed on the balance sheet because they do not have physical substance. 
C)  noncurrent resources. 
D)  listed as a long-term investment on the balance sheet. 
A)  listed under current assets on the balance sheet. 
B)  not listed on the balance sheet because they do not have physical substance. 
C)  noncurrent resources. 
D)  listed as a long-term investment on the balance sheet.

Question 15

The most efficient way to accomplish closing entries is to

Accepted Answer

A)  credit the income summary account for each revenue account balance. 
B)  debit the income summary account for each expense account balance. 
C)  credit the owner's drawing balance directly to the income summary account. 
D)  credit the income summary account for total revenues and debit the income summary account for total expenses. 
A)  credit the income summary account for each revenue account balance. 
B)  debit the income summary account for each expense account balance. 
C)  credit the owner's drawing balance directly to the income summary account. 
D)  credit the income summary account for total revenues and debit the income summary account for total expenses.

Question 16

A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Closing entries

Accepted Answer

A)  are prepared before the financial statements. 
B)  reduce the number of permanent accounts. 
C)  cause the revenue and expense accounts to have zero balances. 
D)  summarize the activity in every account. 
A)  are prepared before the financial statements. 
B)  reduce the number of permanent accounts. 
C)  cause the revenue and expense accounts to have zero balances. 
D)  summarize the activity in every account.

Question 18

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Accepted Answer

A) True 
 B)False

Question 19

The owner's drawing account is a permanent account whose balance is carried forward to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 20

If a company utilizes reversing entries, they will

Accepted Answer

A)  be made at the beginning of the next accounting period. 
B)  not actually be posted to the general ledger accounts. 
C)  be made before the post-closing trial balance. 
D)  be part of the adjusting entry process. 
A)  be made at the beginning of the next accounting period. 
B)  not actually be posted to the general ledger accounts. 
C)  be made before the post-closing trial balance. 
D)  be part of the adjusting entry process.

Exam 4: Completing the Accounting Cycle

Closing the drawing account to Capital is not necessary if net income is greater than owner's drawings during the period.

The following accounts were included on Megan's Style Consultants adjusted trial balance at December 31, 2010: (a) What are total current assets? (b) What are total current liabilities?

If the total debits exceed total credits in the balance sheet columns of the worksheet, owner's equity

Prepare the necessary correcting entry for each of the following. a. A payment of $5,000 for salaries was recorded as a debit to Supplies Expense and a credit to Cash. b. A purchase of supplies on account for $1,000 was recorded as a debit to Equipment and a credit to Accounts Payable.

An intangible asset

The heading for a post-closing trial balance has a date line that is similar to the one found on

Closing entries are journalized and posted

The worksheet does not show

The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010: What is total liabilities and owner's equity at December 31, 2010?

Prepare the necessary closing entries based on the following selected accounts.

A business entity has only one accounting cycle over its economic existence.

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

Intangible assets are

The most efficient way to accomplish closing entries is to

A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet.

Closing entries

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

The owner's drawing account is a permanent account whose balance is carried forward to the next accounting period.

If a company utilizes reversing entries, they will

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

Filters