Exam 4: Completing the Accounting Cycle

The following accounts appear in an adjusted trial balance of Blaine Auto Service Company.Indicate whether each account would be reported in the (a)current assets, (b)property,plant,and equipment, (c)current liabilities, (d)long-term liabilities,or (e)owner's equity section of the December 31 balance sheet of Blaine Auto Service Company.1.Blaine Brock,Capital2.Accumulated Depreciation3.Unearned Revenues4.Mortgage Payable5.Equipment6.Notes Payable (due in two years)7.Cash8.Accounts Receivable

Balance sheet accounts

A fiscal year that ends when business activities have reached their lowest point is called the natural business year.

Financial statements should be prepared before the closing entries are journalized and posted.

A work sheet heading is dated for a period of time.

Which of the following does not appear on the end-of-period spreadsheet?

Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.

The following is the adjusted trial balance for Nadia Company.​ Prepare an income statement,statement of owner's equity,and balance sheet.Assume that the capital account started with a beginning balance of $10,000 and that the owner made an additional investment of $3,000 during the period.

When preparing the statement of owner's equity,the beginning capital balance can always be found

Which of the following account groups includes nominal accounts?

The ability to convert assets into cash is called liquidity.

Of the following steps of the accounting cycle,which step should be completed last?

The work sheet is not considered a part of the formal accounting records.

Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets.

Which of the following is not true about closing entries?

A post-closing trial balance should be prepared before the financial statements are prepared.

The statement of owner's equity begins with the beginning balance followed by

The post-closing trial balance will generally have fewer accounts than the trial balance.

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

The work sheet is a working paper that accountants can use to summarize adjusting entries and the account balances for the financial statements.