Exam 6: Completing a Worksheet and Completing the Accounting Cycle

Each of the following accounts is closed to Income Summary except

A post-closing trial balance should be prepared

Four of the nine steps in the accounting cycle are: W. Prepare a trial balance. X. Journalize and post adjusting entries. Y. Prepare an adjusted trial balance. Z. Prepare financial statements In what order do these four steps occur?

After closing entries are posted, the balance in the owner's capital account in the ledger will be equal to

The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

Closing entries are made

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

The final step in the accounting cycle is to prepare

Temporary accounts include __________ ___________ accounts and Drawings.

Under Protection provides underground storage facilities for companies desiring off-site storage of sensitive documents, computer records, and other items. They have developed a sophisticated surveillance and security system which they initially used in their own facilities, and have recently started to market elsewhere as well. The underground storage facilities are made from natural caves in some instances (reinforced and modified as appropriate) and from excavations of natural rock formations in others. The land was purchased over ten years ago for a total of $2.5 million. The modifications have cost approximately $15 million more. The company has never depreciated its storage facilities because the market value of the property has continued to rise. Presently, the market price is between $30 and $40 million. Betsy Brantley, a new accounting manager, questioned this depreciation policy. Will Gray, the controller, has told her that she needn't worry about it. For one thing, he says, this is really a special form of Land account, which should not Required: What are the ethical issues in this situation?

You have recently started to work for Thom Hanks, manufacturers of cemetery markers and monuments. During your first month at work, you inadvertently recorded as an expense, about $6,000 of prepayments for insurance. The financial statements had been released within the company when you discovered your error. The month-end closing had not been completed, however, and you were able to correct the accounts without incident. Required: Prepare a short note to accompany the re-released financial statements explaining the mistake.

The worksheet is

Which of the following is an optional step in the accounting cycle?

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

The income statement for the month of June, 2022 of Snap Shot, Inc. contains the following information: Revenues \7 ,300 Expenses: Salaries and Wages Expense \ 3,000 Rent Expense 1,300 Advertising Expense 700 Supplies Expense 200 Insurance Expense 100 Total expenses 5,300 Net income (loss) \2 ,000 The entry to close the revenue account includes a

Which is true?

The net income (or loss) for the period

Instead of preparing a correcting entry, it is possible to reverse the incorrect entry and then prepare the correct entry. This approach will result in

These accounts are among the accounts in Sportsline's adjusted trial balance in the worksheet: Accumulated depreciation \ 15,000 Depreciation expense 5,000 Insurance expense 3,000 Prepaid Insurance 6,000 Salaries \& wages expense 20,000 Salaries \& wages payable 7,000 What is the total in the balance sheet credit column, based only on these accounts?

If a purchase of supplies was incorrectly recorded as a purchase of equipment, the correcting entry would ____________ Equipment and _________ Supplies.