Exam 4: Completing the Accounting Cycle

Land is an example of a plant asset.

Balance sheet accounts are not considered real accounts.

Cash and other assets that may reasonably be expected to be realized in cash,sold,or consumed through the normal operations of a business,usually longer than one year,are called current assets.

Finley Company End-of-Period Spreadsheet For the Year Ended December 31 Account Title Debit Credit Cash 48,000 Accounts Receivable 18,000 Supplies 6,000 Equipment 57,000 Accumulated Depr. 18,000 Accounts Payable 25,000 Wages Payable 6,000 Common Stock 30,000 Retained Earnings 3,000 Dividends 3,000 Fees Earned 155,000 Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 Totals Net Income Loss Debit Credit Debit Credit 48,000 18,000 6,000 57,000 18,000 25,000 6,000 30,000 3,000 3,000 155,000 3,000 27,000 15,000 105,000 155,000 132,000 82,000 50,000 50,000 155,000 -The journal entry to close revenues would be:

On September 1,the company pays rent for twelve months in advance and debits an asset account.At year end,the adjusting entry on the work sheet would

Examples of temporary accounts are Supplies and Prepaid Expenses,which are in the ledger for just a short time before they expire.

Entries required to close the balances of the temporary accounts at the end of the period are called final entries.

Shores Sports rents canoes and kayaks.Below is the adjusted trial balance at December 31. Debit Credit Cash 1,500 Accounts Receivable 2,000 Interest Receivable 100 Prepaid Insurance 1,600 Notes Receivable Long-Term 2,800 Equipment 15,000 Accumulated Depreciation 3,000 Accounts Payable 2,400 Accrued Expenses Payable 3,920 Income Taxes Payable 2,700 Unearned Rent Fees 500 Common Stock 7,700 Dividends 2,000 Rent Fees Earned 37,000 Furniture Rental Revenue 1,200 Interest Revenue 100 Wages Expense 19,000 Depreciation Expense 1,800 Utilities Expense 320 nsurance Expense 700 Maintenance Expense 9,000 ncome Tax Expense The entry required to close the revenue accounts at the end of the period includes a

The closing process is sometimes referred to as closing the books.

Which of the following is not an essential part of the accounting records?

A fiscal year for a business

After all adjustments have been made,but before the accounts have been closed,the following balances were taken from the ledger of Ramona's Designs: Accounts Payable \ 27,600 Accounts Receivable 64,500 Accumulated Depreciation 73,325 Cash 17,150 Depreciation Expense 13,500 Equipment 165,000 Insurance Expense 2,510 Prepaid Insurance 6,275 Rent Expense \ 32,700 Salary Expense 41,390 Salaries Payable 8,150 Service Revenue 186,000 Supplies 1,500 Supplies Expense 2,500 Common Stock 79,950 Dividends 48,000 Retained Earnings 20,000 Journalize the entries to close the appropriate accounts.

Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.

The unadjusted,adjusted,and final trial balances are prepared during the accounting cycle of a period.

You have just accepted your first job out of college,which requires you to evaluate loan requests at Eastwood National Bank.The first loan request you receive is from Richard Enterprises.Richard Tracy,the CEO,is requesting $105,000 and brings you the following trial balance or statement of accounts for the first year of operations ended December 31. Which of the following accounts do you think might need to be adjusted before an accurate set of financial statements could be prepared?

Daniel Corporation's end-of-period spreadsheet at the end of July has $4,950 in the Balance Sheet Credit column for Accumulated Depreciation.The end-of-period spreadsheet at the end of August has $7,600 in the Balance Sheet Credit column for Accumulated Depreciation.What was the amount of the depreciation expense adjustment for the month of August?

The income statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520.What does this information mean to the accountant?

The chart of accounts,the journal,and the ledger are essential parts of the accounting system.

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Stockton Company }$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Adjusted Trial Balance }$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { December } 31$ Cash 7,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation 1,100 Accounts Payable 1,900 Notes Payable 4,300 Common Stock 1,000 Retained Earnings 12,940 Dividends 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals 30,490 30,490 -Determine total assets.

The journal entry to close the Fees Earned,$750,and Rent Revenue,$175,accounts during the year-end closing process would be: