Exam 4: Completing the Accounting Cycle

A worksheet can be helpful in showing the effects of proposed or "what if" transactions, as well as being useful in helping to prepare end-of-period financial statements.

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:

The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for temporary accounts, and (2) all temporary accounts have zero balances.

Closing entries are required at the end of each accounting period to close all ledger accounts.

Statements that show the effects of proposed transactions as if the transactions had already occurred are called:

Shown below are selected data taken from the unadjusted and adjusted trial balances for the Simonson Company for the current year ended December 31. Determine the items A through H below.

The Income Summary account is used:

The ___________________ account is used only in the closing process.

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

The following items appeared on a company's December 31 work sheet for the current period. Based on the following information, what is the net income for the current period?

The Adjusted Trial Balance of Bade Cleaning Service is entered on the partial work sheet below. Complete the work sheet by extending the account balances into the appropriate financial statement columns and by entering the amount of net income for the reporting period:

The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.

Excalibur frequently has accrued expenses at the end of its fiscal year that should be recorded for proper financial statement presentation. Excalibur pays on a weekly basis and has $50,000 of accrued salaries incurred but not paid for June 30, its fiscal year-end. This consists of one day's accrued salaries for the week. Excalibur will pay its employees $250,000 on July 4; the one day of accrued salaries and the remaining four days for July salaries. Record the following entries: (a) Accrual of the salaries on June 30. (b) Payment of the salaries on July 4, assuming that Excalibur does not prepare reversing entries. (c) Assuming that Excalibur prepares reversing entries, reverse the adjusting entry made on June 30. (d) Assuming that Excalibur prepares reversing entries, payment of the salaries on July 4.

A company's post-closing trial balance has total debits of $40,350 and total credits of $40,650. Accordingly, the company should review for errors in the closing process.

Compute Dave Company's current ratio using the following information:

Intangible assets are long-term resources used to produce or sell products and services; they generally lack ______________ and their benefits are highly ___________.

A current ratio of 2.1 suggests that a company has ____________ current assets to cover current liabilities.

The following are the steps in the accounting cycle. List them in the order in which they are completed: Prepare adjusted trial balance Post transactions Prepare an unadjusted trial balance Journalize transactions Prepare the financial statements Close the temporary accounts Adjust the ledger accounts Prepare a post-closing trial balance Analyze transactions

Assets, liabilities, and equity accounts are not closed; these accounts are called:

Cash and office supplies are both classified as current assets.