Exam 4: Completing the Accounting Cycle

Sebastien Company earned net income of $44,000 during 2021.The company paid dividends totalling $20,000 during the period.Prepare the entries to close Income Summary and the Dividends account.

If errors occur in the recording process, they

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

Income Summary has a credit balance of $17,000 in S.Sufjan Co.after closing revenues and expenses.The entry to close Income Summary is

Identify which of the following accounts would have balances on a post-closing trial balance. (1) Service Revenue (2) Income Summary (3) Notes Payable (4) Interest Expense (5) Cash

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

Closing entries

IFRS requires the use of

A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet.

A lawyer collected $710 of legal fees in advance.He erroneously debited Cash for $170 and credited Accounts Receivable for $170.The correcting entry is

Correcting entries

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger.Where should these additional accounts be shown on the worksheet?

The post-closing trial balance will contain only retained earnings statement accounts and balance sheet accounts.

A post-closing trial balance should be prepared

Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.

The most important information needed to determine if companies can pay their current obligations is the

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as investments is

The following information is for Bright Eyes Auto Supplies: The total dollar amount of liabilities to be classified as current liabilities is

The use of fair value to report assets

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