Exam 3: Double-Entry Accounting and the Accounting Cycle

Cash is normally a credit balance.

Which of the following is a current asset item on the Statement of Financial Position?

A net loss occurs when

A major disadvantage of the template approach is the number of columns that can be manageably used. This disadvantage can be eliminated through

Which of the following relationships best expresses the double-entry nature of an accounting system?

Which of the following is not part of the accounting cycle?

What are temporary accounts and why are they used?

In practice, an accounting system's chart of accounts includes

Which of the following accounting records is in chronological order?

Indicate with a Dr. or a Cr. whether each of the following accounts normally has a debit or a credit balance.

Shown below is an adjusted trial balance for Debrose Enterprises Ltd. at the end of its accounting period, October 31, 2020. Instructions a) Prepare a Statement of Income. b) Prepare a Statement of Changes in Equity. c) Prepare a classified Statement of Financial Position.

Which of the following would be the adjusting entry to record accrued interest on a loan made to the business at the end of an accounting period?

What are adjusting entries and in what two types of situations are they necessary? Provide an example.

Which of the following would be the adjusting journal entry to recognize earned but unpaid wages for the period?

The purchase of land for a combination of cash and issuance of shares would require which of the following entries?

Fill in the blanks using the words provided below: Analyzing, Statement of Financial Position, crediting, debiting, journal, ledger, prepaid expenses, posting, unearned revenue. a) The act of entering an amount on the left side of an account is called ___ the account, and making an entry on the right side is called ___ the account. b) The basic steps in the recording process are ___ each transaction, entering the transaction in a ___, and ___ the information to appropriate accounts in the ___. c) Expenses paid and recorded in an asset account before they are used or consumed are called ___. Revenue received and recorded as a liability before it is earned is referred to as ___. d) The ___ reports the assets, liabilities, and shareholders' equity of a business on a specific date.

Shown below is the trial balance for Kel-Mar Bakery Co. as at December 31, 2020, the company's year end. The company owner provides you with the following additional information: a) No interest has been paid yet on the note payable. The note has been outstanding since April 1 and the interest rate is 6%. b) The equipment originally cost $200,000 and has an estimated residual value of $20,000 and a useful life of 6 years. c) On June 1 the company renewed its insurance policy and paid a $1,200 premium for the year. It was correctly recorded at that time as prepaid insurance. d) On October 1 the company sold a 12-month service contract to a client for $18,000 and recorded it as Unearned Revenue because at that point they had not yet provided any service to the client. They have been providing the service since the contract was sold. Instructions Prepare any adjusting entries required.

Which of the following could cause the trial balance to be out of balance?

An example of a contra asset account is

Given the following adjusted trial balance: Instructions a) Determine the 1. net income (loss). 2. current assets. 3. total assets. 4. shareholders' equity. 5. gross profit. 6.current liabilities. b) Prepare any closing entries required. Assume dividends declared and paid in 2020 are $19,000. a) Determine the