Exam 4: Completing the Accounting Cycle

Match the items below by entering the appropriate code letter in the space provided. A. Worksheet B. Permanent accounts C. Closing entries D. Income Summary E. Reversing entry F. Common Stock G. Current assets H. Operating cycle I. Long-term liabilities J. Correcting entries 1. Obligations that a company expects to pay after one year. 2. A part of owners' equity in a corporation. 3. An optional tool which facilitates the preparation of financial statements. 4. A temporary account used in the closing process. 5. Balance sheet accounts whose balances are carried forward to the next period. 6. The average time that it takes to go from cash to cash in producing revenues. 7. Entries to correct errors made in recording transactions. 8. The exact opposite of an adjusting entry made in a previous period. 9. Entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders' equity account. 10. Assets that a company expects to pay or convert to cash or use up within one year.

An examination of the accounts of Savage Company for the month of June revealed the following errors after the transactions were journalized and posted. 1. A check for $800 from R. Wright, a customer on account, was debited to Cash $800 and credited to Service Revenue, $800. 2. A payment for Advertising Expense costing $630 was debited to Utilities Expense, $360 and credited to Cash $360. 3. A bill for $850 for Supplies purchased on account was debited to Equipment, $580 and credited to Accounts Payable $580. Instructions Prepare correcting entries for each of the above assuming the erroneous entries are not reversed. Explain how the transaction as originally recorded affected net income for the month of June.

Most companies that follow IFRS present balance sheet (statement of financial position) information in this order:

A worksheet is a multiple column form that facilitates the

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. Stockholders' equity D. Intangible assets H. Not on the balance sheet _____ 1. Accumulated Depreciation _____ 6. Inventory _____ 2. Retained Earnings _____ 7. Patents _____ 3. Interest Expense _____ 8. Prepaid Rent _____ 4. Salaries and Wages Payable _____ 9. Mortgage Payable _____ 5. Dividends _____ 10. Land Held for Investment

Current assets are customarily the first items listed on a classified balance sheet.

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

The following items are taken from the adjusted trial balance of Westley Company for the month ending July 31, 2018: Prepare the current assets section of Westley's classified balance sheet.

Intangible assets are

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

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

A current asset is

The income statement for the month of June, 2018 of Camera Obscura Enterprises contains the following information: The entry to close the expense accounts includes a

A worksheet is an optional working tool used by accountants to facilitate the preparation of financial statements. Consider the steps followed in preparing a worksheet. How does the use of a worksheet assist the accountant. Could financial statements be prepared without a worksheet? Evaluate how the process would differ. Consider factors such as timeliness, accuracy, and efficiency in your evaluation.

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as property, plant, and equipment is

To close net income to retained earnings, Income Summary is debited and Retained Earnings is credited.

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2018: What is the amount that would be reported for stockholders' equity at December 31, 2018?

Compute the dollar amount of current assets based on the following account balances.

The steps in the preparation of a worksheet do not include

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