Exam 4: Completing the Accounting Cycle

Presented below are the owner's Capital, Withdrawals, and Income Summary accounts for Homer's Pet Grooming Boutique for the year ended December 31, 20xx. In the journal provided, prepare the closing entries that resulted in the T accounts above. Assume that the only revenue is Revenue from Services and the only expense is Advertising Expense. Omit explanations.

On a work sheet, the balance of the owner's Capital account is its ending amount for the period.

When there is a net loss, the entry to close the Income Summary account is

The amount of the Withdrawals account can be found on the work sheet.

A work sheet is useful for all except which of the following?

A temporary account is also known as a nominal account.

The owner's Capital, Withdrawals, and Income Summary accounts for Harmon Repair Company for the accounting period are presented below in T account form after the recording and posting of closing entries: The amount of withdrawals for the period is

Which of the following is not a permanent account?

There is sufficient information on a post-closing trial balance to prepare an income statement.

On which financial statement does Income Summary appear?

Cash is a nominal account.

A work sheet is more useful for a small company than for a large one.

The purpose of reversing entries is to simplify the bookkeeping process.

Adjusting entries, like any other entries, are posted to the ledger.

A reversing entry is acceptable for which of the following?

The balance of the Wages Expense account of Ryan Company, prior to adjustment, was $9,500. On June 30, the end of the fiscal quarter, an adjustment for $790 of accrued wages needed to be made. Prepare the adjusting entry for wages, the entry to close the Wages Expense account, and the corresponding reversing entry. Omit explanations.

Below are the adjusted accounts of Valdez Realtors for the month ended July 31, 20xx, listed in alphabetical order: Accounts Payable \ 500 Land \ 1,500 Accounts Receivable 3,600 Office Equipment 10,900 Accumulated Depreciation- Salaries Expense 2,400 Office Equipment 4,000 Toni Valdez, Capital 8,900 Cash 1,150 Toni Valdez Withdrawals 1,000 Commissions Revenue 7,500 Utilities Expense 150 Depreciation Expense- Office Equipment 200 Prepare a post-closing trial balance.

Which of the following could not possibly be a closing entry?

Briefly distinguish between adjusting and closing entries.

Use the following adjusted trial balance to answer the question(s) below. The entry to close the Leroy Allen, Withdrawals account is: