A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Wilson Peters, Capital in the process of closing the Income Summary account? (Assume all accounts have normal balances.)$\begin{array}{lr} \text { Wilson Peters, Capital } & \$ 7,000 \\ \text { Wilson Peters, Withdrawals } & 9,600 \end{array}$ $\begin{array} { l r } \text { Revenue } & 29,000 \\ \text { Rent expense } & 3,600 \\ \text { Salaries expense } &7,200\\ \text { Insurance expense } & 920 \\ \text { Depr.Expense-equipment } &500 \\ \text { Accum depr.-equipment } & 1,500 \end{array}$

A) $7,180 credit. B) $16,780 credit. C) $16,780 debit. D) $23,780 credit. E) $18,280 credit. A) $7,180 credit. B) $16,780 credit. C) $16,780 debit. D) $23,780 credit. E) $18,280 credit.

The adjusted trial balance of the Waterstone Company follows: $\begin{array}{c} \text { Waterstone Company}\\ \text { Adjusted Trial Balance}\\ \text { December 31}\\ \begin{array}{r|r|c|l} & \text { Debit } & \text { Credit } \\ \hline \text { Cash } & 8,000 & \\ \hline \text { Erepaid insurance } & 2,400 & \\ \hline \text { Equipment } & 18,000 & \end{array}\end{array}$ $\begin{array}{r|c|c} \hline \text { Accumulated depreciation-Equipment } & & 3,600 \\ \hline \text { Salaries payable } & & 2,000 \\ \hline \text { Unearned repar fees } & & 1,200 \\ \hline \text { T. Waterstone, Capital } & & 11,400\\ \hline \text { T. Waterstone, Withdrawals } & 4,000 & \\ \hline \text { Repair fees earned } & & 27,500 \\ \hline \text { Salaries expense } & 10,000 & \\ \hline \text { Depreciation expense } & 1,800 & \\ \hline \text { Insurance expense } & 1,500 & \\ \hline \text { Totals } & 45,700 & 45,700\\ \hline \end{array}$ Prepare the closing entries for Waterstone Company.

\[\begin{array} { | l | c | r | r | } \

Calculate the current ratio for each of the following companies and identify the company with the strongest liquidity position. \[\begin{array} { | l | l | l | } \hline & \text { Current Astets } & \text { Current Liabilities } \\ \hline \text { Company A } & \$ 1,752,000 & \$ 1,267,000 \\ \hline \text { Company I } & \$ 863,500 & \$ 481,000 \\ \hline \text { Company T } & \$ 366,800 & \$ 419,000 \\ \hline \end{array}\]

Current Ratio = Current Assets/Current L

Use the information in the adjusted trial balance presented below to calculate current assets for Taron Company: \[\begin{array} { | l | r | r | } \hline \text { Account Title } & { \text { Dr. } } & \text { Cr. } \\ \hline \text { Cash } & \$ 23,000 & \\ \hline \text { Accounts receivable } & 16,000 & \\ \hline \text { Prepaid insurance } & 6,600 & \\ \hline \text { Equipm ent } & 100,000 & \\ \hline \text { Accumulated Depreciation -Equipment } & & \$ 50,000 \\ \hline \text { Land } & 95,000 & \\ \hline \text { Accounts payable } & & 17,000 \\ \hline \text { Interest payable } & & 2,400 \\ \hline \text { Unearned revenue } & & 5,000 \\ \hline \text { Long-term notes payable } & & 30,000 \\ \hline \text { Z. Taron, Capital } & & 136,200 \\ \hline \text { Totals } &\$ 240,600 & \$ 240,600\\ \hline \end{array}\]

A) $45,600. B) $21,200. C) $41,200. D) $95,600. E) $24,400. A) $45,600. B) $21,200. C) $41,200. D) $95,600. E) $24,400.

Exam 4: Completing the Accounting Cycle

A ________ is an optional working paper that helps in preparing financial statements, is useful in preparing interim statements, and is helpful in showing the effects of proposed transactions.

(Short Answer)

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Question 121

Jen Rogers withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is:

(Multiple Choice)

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Question 122

Describe a work sheet and explain why it is useful.

(Essay)

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Question 123

Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

(Multiple Choice)

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Question 124

Balance sheet accounts are called__________ accounts because they carry their balances to the next accounting period, and are not closed as long as the company continues to own the asset, owe the liability and have equity.

(Short Answer)

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Question 125

How is the current ratio calculated? How is it used to evaluate a company?

(Essay)

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Question 126

A company's ledger accounts and their end-of-period balances before closing entries are posted are shown below. What amount will be posted to Wilson Peters, Capital in the process of closing the Income Summary account? (Assume all accounts have normal balances.) Wilson Peters, Capital \ 7,000 Wilson Peters, Withdrawals 9,600 Revenue 29,000 Rent expense 3,600 Salaries expense 7,200 Insurance expense 920 Depr.Expense-equipment 500 Accum depr.-equipment 1,500

(Multiple Choice)

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Question 127

A benefit of using a work sheet is that it aids in the preparation of the financial statements.

(True/False)

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Question 128

How is a classified balance sheet different from an unclassified balance sheet? List the usual order of the categories on a classified balance sheet.

(Essay)

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Question 129

The steps in the closing process are (1) close credit balances in revenue accounts to Income Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income Summary to Owner's Capital; (4) close Withdrawals to Owner's Capital.

(True/False)

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Question 130

The current ratio is used to help assess a company's ability to pay its debts in the near future.

(True/False)

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Question 131

Kline Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?

(Multiple Choice)

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Question 132

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. -What is the correct closing entry for the expense accounts?

(Multiple Choice)

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Question 133

The adjusted trial balance of the Waterstone Company follows: Waterstone Company Adjusted Trial Balance December 31 Debit Credit Cash 8,000 Erepaid insurance 2,400 Equipment 18,000 Accumulated depreciation-Equipment 3,600 Salaries payable 2,000 Unearned repar fees 1,200 T. Waterstone, Capital 11,400 T. Waterstone, Withdrawals 4,000 Repair fees earned 27,500 Salaries expense 10,000 Depreciation expense 1,800 Insurance expense 1,500 Totals 45,700 45,700 Prepare the closing entries for Waterstone Company.

(Essay)

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Question 134

Adjustments must be entered in the journal and posted to the ledger after the work sheet is prepared.

(True/False)

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Question 135

Calculate the current ratio for each of the following companies and identify the company with the strongest liquidity position. Current Astets Current Liabilities Company A \ 1,752,000 \ 1,267,000 Company I \ 863,500 \ 481,000 Company T \ 366,800 \ 419,000

(Essay)

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Question 136

Closing entries are required:

(Multiple Choice)

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Question 137

Use the information in the adjusted trial balance presented below to calculate current assets for Taron Company: Account Title Dr. Cr. Cash \ 23,000 Accounts receivable 16,000 Prepaid insurance 6,600 Equipm ent 100,000 Accumulated Depreciation -Equipment \ 50,000 Land 95,000 Accounts payable 17,000 Interest payable 2,400 Unearned revenue 5,000 Long-term notes payable 30,000 Z. Taron, Capital 136,200 Totals \ 240,600 \ 240,600

(Multiple Choice)

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Question 138

The ________ account is a temporary account used only in the closing process.

(Short Answer)

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Question 139

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. -What is the correct closing entry for the revenue accounts?

(Multiple Choice)

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Question 140

Exam 4: Completing the Accounting Cycle

A ________ is an optional working paper that helps in preparing financial statements, is useful in preparing interim statements, and is helpful in showing the effects of proposed transactions.

Jen Rogers withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is:

Describe a work sheet and explain why it is useful.

Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

Balance sheet accounts are called__________ accounts because they carry their balances to the next accounting period, and are not closed as long as the company continues to own the asset, owe the liability and have equity.

How is the current ratio calculated? How is it used to evaluate a company?

A benefit of using a work sheet is that it aids in the preparation of the financial statements.

How is a classified balance sheet different from an unclassified balance sheet? List the usual order of the categories on a classified balance sheet.

The steps in the closing process are (1) close credit balances in revenue accounts to Income Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income Summary to Owner's Capital; (4) close Withdrawals to Owner's Capital.

The current ratio is used to help assess a company's ability to pay its debts in the near future.

Kline Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. -What is the correct closing entry for the expense accounts?

Adjustments must be entered in the journal and posted to the ledger after the work sheet is prepared.

Calculate the current ratio for each of the following companies and identify the company with the strongest liquidity position. Current Astets Current Liabilities Company A \ 1,752,000 \ 1,267,000 Company I \ 863,500 \ 481,000 Company T \ 366,800 \ 419,000

Closing entries are required:

The ________ account is a temporary account used only in the closing process.

The F. Mercury, Capital account has a credit balance of $37,000 before closing entries are made. Total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. -What is the correct closing entry for the revenue accounts?

Accounting in Business

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