Exam 4: Completing the Accounting Cycle

After posting the entries to close all revenue and expense accounts, Marker Company's Income Summary account has a credit balance of $6,000, and its Marker, Withdrawals account has a debit balance of $2,500. These balances indicate that net income for the current accounting period amounted to $3,500.

All necessary amounts to prepare the balance sheet, including ending owner's capital, can be found in the Balance Sheet columns of the work sheet.

The current ratio:

An unclassified balance sheet provides more information to users than a classified balance sheet.

All of the following statements regarding the Income Statement columns on the worksheet are true except:

Which of the following statements is true?

Assets are often classified into current assets, long-term investments, plant assets, and intangible assets.

The closing process takes place before financial statements have been prepared.

A classified balance sheet differs from an unclassified balance sheet in that

The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.

After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.

Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

The following information is available for the Higgins Travel Agency. After closing entries are posted, what will be the balance in the C. Higgins, Capital account? Net Income \ 42,500 C. Higgins, Capital 130,000 C. Higgins, Withdrawals 12,000

Which of the following is classified as a plant asset?

Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are:

The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital? J. Brendon, Capital \ 112,000 J. Brendon, Withdrawals 32,000 Fees earned 187,000 Depreciation Expense-Equipment 12,000 Wages expense 71,400 Interest expense 3,300 Insurance expense 11,700 Rent expense 24,200

Intangible assets are long-term resources that benefit business operations that usually lack physical form and have uncertain benefits.

List the steps in the accounting cycle.

Closing entries are required:

Flo's Flowers' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Flo's can cover its short term liabilities with its short term assets.