Exam 4: Completing the Accounting Cycle

The following is the adjusted trial balance as of December 31,2019 of Barone Brothers Company: Accounts Debit Credit Cash \ 18,000 Accounts Receivable 30,000 Prepaid Insurance 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 100,00 Martin, Capital 21,290 Martin, Withdrawals 25,840 Service Revenue 325,00 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 expenses.Omit explanation.

Which of the following statements regarding intangible assets is incorrect?

What is the net result if the amount of net income for the year is less than the amount of the owner's withdrawals?

Which of the following accounts would appear in the balance sheet credit column of the worksheet?

The Accounts Payable account is a temporary account.

If a business has a net loss,the closing entry to close Income Summary would be a debit to Income Summary and a credit to Owner,Capital.The business is a sole proprietorship.

Only permanent accounts appear on the post-closing trial balance.

In which of the columns of a worksheet would a net loss be found?

Liquidity is a measure of how ________.

The accounts from the Adjusted Trial Balance are listed in alphabetical order.Use this information for Lawrence Service Company to prepare the classified balance sheet at September 30,2018.Use the report form.You must compute the ending balance of Lawrence,Capital.There were no new capital contributions during the month.

To which of the following accounts should the balance in the Income Summary account be closed?

The adjusting process zeroes out all revenue accounts and all expense accounts.

The worksheet is an external tool that can be used to help in recording adjusting entries and preparing financial statements.

Which of the following accounts would appear in the income statement credit column of the worksheet?

List the order in which the balance sheet,statement of owner's equity,and income statement are prepared.Briefly discuss why this order is necessary.

A current ratio that has increased from the prior period indicates an improvement in the company's ability to pay its current debts.

When a business uses a computerized accounting system,the closing entries must be manually recorded.

The current ratio measures a company's ________.

In an accounting cycle,an analysis of transactions is performed at the end of each accounting period.

Which of the following accounts will be included in a post-closing trial balance?