Exam 6: Completing a Worksheet and Completing the Accounting Cycle

Correcting entries always affect at least one balance sheet account and one income statement account.

The adjusted account balances of the Wellness Center at July 31 are as follows:

The entry to close the Retained Earnings account includes a debit to net income.

The post-closing trial balance is entered in the first two columns of a worksheet.

Balance sheet accounts are considered to be

The income statement for the year 2022 of Bugati Co. contains the following information: $\begin{array}{lr}\text { Revenues }&&\$73,000\\\text { Expenses: }\\\text { Salaries and Wages Expense } & \$ 43,000 \\\text { Rent Expense } & 12,000 \\\text { Advertising Expense } & 11,000 \\\text { Supplies Expense } & 6,000 \\\text { Utilities Expense } & 3,500 \\\text { Insurance Expense } & 4,000 \\\text { Total expenses }&&79,500\\\text { Net income (loss) }&&\$(6,500)\end{array}$ The entry to close the expense accounts includes a

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

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals: The net income (or loss) for the period is

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

To close a net loss to owner's capital, Income Summary is debited and Owner's Capital is credited.

The worksheet for Gibler Rental Company appears below. Using the adjustment data below, complete the worksheet. Add any accounts that are necessary. Adjustment data: (a) Prepaid insurance expired during August, $3. (b) Depreciation expense on equipment for the month of August, $8. (c) Supplies on hand on August 31 amounted to $6. (d) Salaries and wages expense incurred at August 31 but not yet paid amounted to $10.

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

A post-closing trial balance will show

A worksheet is a multiple column form that facilitates the

The first step in preparing a worksheet is to prepare a ______________ from the general ledger accounts.

Closing entries

Correcting entries

When a worksheet is used, adjusting entries are prepared from

It is not necessary to prepare formal financial statements if a worksheet has been prepared because the financial position and net income are shown on the worksheet.

Journalizing and posting closing entries is a required step in the accounting cycle. Discuss why it is necessary to close the books at the end of an accounting period. If closing entries were not made, how would the preparation of financial statements be affected?