Exam 4: Completing the Accounting Cycle

The Accumulated Depreciation account is a permanent account.

Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the business's normal operating cycle if the cycle is longer than a year, are called ________ assets.

The following is the adjusted trial balance as of December 31, 2019 of Bright Exteriors, Inc., after the first year of operations: Accounts Debit Credit Cash \ 18,000 Accounts Receivable 30,000 Prepaid Instrance 9,000 Office Supplies 3,200 Land 45,000 Building 165,000 Accumulated Depreciation-Building \ 12,000 Equipment 88,000 Accumulated Depreciation-Equipment 8,500 Accounts Payable 12,000 Salaries Payable 2,000 Unearned Revenue 25,000 Mortgage Payable 100,000 Common Stock 21,290 Dividends 25,840 Service Revenue 325,000 Salaries Expense 63,000 Depreciation Expense-Building and Equipment 6,250 Supplies Expense 15,000 Insurance Expense 14,500 Utilities Expense 23,000 Total \ 505,790 \ 505,790 Prepare the closing entry for the Income Summary account. Omit explanation.

The beginning balance in the Common Stock account of a company was $10,000. The revenues and expenses were $200,000 and $140,000, respectively. During the year, the company declared and paid dividends of $5,000. The ending balance in the Retained Earnings was $55,000. (Assume that the beginning balance of Retained Earnings was zero.)

The Accounts Receivable account is a permanent account.

Where does net income appear on a worksheet?

The permanent accounts-assets, liabilities, and stockholders' equity-are closed to the Common Stock account.

The following is the adjusted trial balance as of December 31, 2019 of Wilson Repair Services, Inc., after the first year of operations: Accounts Debit Credit Cash \ 18,000 Accounts Receivable 30,000 Prepaid Instrance 9,000 Office Supplies 3,200 Land 45,000 Building 165,000 Accumulated Depreciation-Building \ 12,000 Equipment 88,000 Accumulated Depreciation-Equipment 8,500 Accounts Payable 12,000 Salaries Payable 2,000 Unearned Revenue 25,000 Mortgage Payable 100,000 Common Stock 21,290 Dividends 25,840 Service Revenue 325,000 Salaries Expense 63,000 Depreciation Expense-Building and Equipment 6,250 Supplies Expense 15,000 Insurance Expense 14,500 Utilities Expense 23,000 Total \ 505,790 \ 505,790 Prepare the closing entry for the Income Summary account. Omit explanation.

Permanent accounts are not closed at the end of the accounting period.

The ending balance in the Retained Earnings account is shown on the income statement columns of the worksheet.

A reversing entry ________.

The Dividends account is a permanent account.

Which of the following statements is true of the accounting cycle?

A worksheet can be used to help prepare the financial statements.

The Common Stock account is a temporary account.

An account that is not closed at the end of the period is called a(n) ________.

The financial statements are prepared from the ________.

Under which of the following categories would Accounts Receivable appear?

Which of the following is a measure of how quickly an item can be converted to cash?

A worksheet is a substitute for the financial statements.