Exam 4: Completing the Accounting Cycle

The most important output of the accounting cycle is the financial statements.

The accounting cycle begins with preparing an unadjusted trial balance.

On March 1,a company collects revenue in advance for the next twelve months and credits a liability account.The adjusting entry at year end on the work sheet would

Prepaid Insurance is an example of a current asset.

After posting the second closing entry to the income summary account,the balance will be equal to

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Stockton Company }$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Adjusted Trial Balance }$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { December } 31$ 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 the total liabilities for the period.

The entry to close the appropriate insurance account at the end of the accounting period is

The income summary account is also called

Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?

What is the first account that should be listed in the post-closing trial balance?

Closing entries

The natural business year is a

There are four closing entries.The first one is to close revenues,the second one is to close expenses,the third one is to close ,and the last one is to close the .

Net income is shown on the work sheet in the Income Statement debit column and the Balance Sheet credit column.

Closing entries are entered directly on to the work sheet.

When accounts do not appear on the unadjusted trial balance but are needed to post adjustments,they are simply added to the account title column.

The last step of the accounting cycle is to prepare a post-closing trial balance.

The statement of retained earnings should be prepared

Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?

A post-closing trial balance contains only asset and liability accounts.