Question 1

A post-closing trial balance reports:

Accepted Answer

A)  All ledger accounts with balances, none of which can be temporary accounts. 
B)  All ledger accounts with balances, none of which can be permanent accounts. 
C)  All ledger accounts with balances, which include some temporary and some permanent accounts. 
D)  Only revenue and expense accounts. 
E)  Only asset accounts. 
A)  All ledger accounts with balances, none of which can be temporary accounts. 
B)  All ledger accounts with balances, none of which can be permanent accounts. 
C)  All ledger accounts with balances, which include some temporary and some permanent accounts. 
D)  Only revenue and expense accounts. 
E)  Only asset accounts.

Question 2

A ____________________ helps in preparing financial statements, is useful in preparing interim statements, and is helpful in showing the effects of proposed transactions.

Accepted Answer

The answer of A ____________________ helps in preparing financial statements,...

Question 3

The usual order for the asset section of a classified balance sheet is:

Accepted Answer

A)  Current assets, prepaid expenses, long-term investments, intangible assets. 
B)  Long-term investments, current assets, property, plant and equipment, intangible assets. 
C)  Current assets, long-term investments, property, plant and equipment, intangible assets. 
D)  Intangible assets, current assets, long-term investments, property, plant and equipment. 
E)  Property, plant and equipment, intangible assets, long-term investments, current assets. 
A)  Current assets, prepaid expenses, long-term investments, intangible assets. 
B)  Long-term investments, current assets, property, plant and equipment, intangible assets. 
C)  Current assets, long-term investments, property, plant and equipment, intangible assets. 
D)  Intangible assets, current assets, long-term investments, property, plant and equipment. 
E)  Property, plant and equipment, intangible assets, long-term investments, current assets.

Question 4

The unadjusted trial balance ofE. Pace, Consultant is entered on the partial work sheet below. Complete the work sheet using the following information:
(a) Salaries earned by employees that are unpaid and unrecorded, $500.
(b) An inventory of supplies showed $800 of unused supplies still on hand.
(c) Depreciation on equipment, $1,300.

Accepted Answer

The answer of The unadjusted trial balance ofE. Pace, Consultant...

Question 5

Match the following terms with the appropriate definition.

Accepted Answer

The answer of Match the following terms with the appropriate...

Question 6

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

Accepted Answer

A)  Debit Income Summary $13,000; credit Owner's, Capital $13,000. 
B)  Debit Income Summary $75,000; credit Revenues $75,000. 
C)  Debit Revenues $75,000; credit Income Summary $75,000. 
D)  Debit Income Summary $62,000, credit Expenses $62,000. 
E)  Debit Owner's, Capital $8,000, credit Owner's, Withdrawals $8,000. 
A)  Debit Income Summary $13,000; credit Owner's, Capital $13,000. 
B)  Debit Income Summary $75,000; credit Revenues $75,000. 
C)  Debit Revenues $75,000; credit Income Summary $75,000. 
D)  Debit Income Summary $62,000, credit Expenses $62,000. 
E)  Debit Owner's, Capital $8,000, credit Owner's, Withdrawals $8,000.

Question 7

A columnar working paper used to prepare a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements, and which is an optional tool in the accounting process is a(n) :

Accepted Answer

A)  Adjusted trial balance. 
B)  Work sheet. 
C)  Post-closing trial balance. 
D)  Unadjusted trial balance. 
E)  General ledger. 
A)  Adjusted trial balance. 
B)  Work sheet. 
C)  Post-closing trial balance. 
D)  Unadjusted trial balance. 
E)  General ledger.

Question 8

Balance sheet accounts are called ____________________ accounts because they carry their balances to the next accounting period, and are not closed as long as the company continues to own the asset, owe the liability and have equity.

Accepted Answer

The answer of Balance sheet accounts are called ____________________ accounts...

Question 9

Closing entries result in net income or net loss being transferred to the owner's capital account.

Accepted Answer

A) True 
 B)False

Question 10

The following information has been gathered for Stylish Co. to assist in preparing its year-end adjusting entries at December 31:
(a) The company has earned $2,500 of rental revenue that has not yet been received or recorded.
(b) Stylish has recorded $3,200 of unearned service fees. At year-end, $1,500 of this amount has been earned.
(c) Depreciation on equipment for the year is $7,800.
(d) Employees have earned but have not yet been paid $2,750 in salaries.
Identify which of the above accounting adjustment would be reversed assuming Stylish Co. uses reversing entries.

Accepted Answer

(a) Reversed.
(b) No

Question 11

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

Accepted Answer

A)  Pro forma statements. 
B)  Professional statements. 
C)  Simplified statements. 
D)  Temporary statements. 
E)  Interim statements. 
A)  Pro forma statements. 
B)  Professional statements. 
C)  Simplified statements. 
D)  Temporary statements. 
E)  Interim statements.

Question 12

The recurring steps performed each reporting period, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

Accepted Answer

A)  Accounting period. 
B)  Operating cycle. 
C)  Accounting cycle. 
D)  Closing cycle. 
E)  Natural business year. 
A)  Accounting period. 
B)  Operating cycle. 
C)  Accounting cycle. 
D)  Closing cycle. 
E)  Natural business year.

Question 13

Which of the following statements is ?

Accepted Answer

A)  Owner's capital must be closed each accounting period. 
B)  A post-closing trial balance should include only permanent accounts. 
C)  Information on the work sheet can be used in place of preparing financial statements. 
D)  By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts. 
E)  Closing entries are only necessary if errors have been made. 
A)  Owner's capital must be closed each accounting period. 
B)  A post-closing trial balance should include only permanent accounts. 
C)  Information on the work sheet can be used in place of preparing financial statements. 
D)  By using a work sheet to prepare adjusting entries you need not post these entries to the ledger accounts. 
E)  Closing entries are only necessary if errors have been made.

Question 14

When closing entries are made:

Accepted Answer

A)  All ledger accounts are closed to start the new accounting period. 
B)  All temporary accounts are closed but not the permanent accounts. 
C)  All real accounts are closed but not the nominal accounts. 
D)  All permanent accounts are closed but not the nominal accounts. 
E)  All balance sheet accounts are closed. 
A)  All ledger accounts are closed to start the new accounting period. 
B)  All temporary accounts are closed but not the permanent accounts. 
C)  All real accounts are closed but not the nominal accounts. 
D)  All permanent accounts are closed but not the nominal accounts. 
E)  All balance sheet accounts are closed.

Question 15

The current ratio is computed by dividing current liabilities by current assets.

Accepted Answer

A) True 
 B)False

Question 16

Dina Kader withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is:

Accepted Answer

A)  Debit Income Summary and credit Cash for $35,000. 
B)  Debit Dina Kader, Withdrawals and credit Cash for $35,000. 
C)  Debit Income Summary and credit Dina Kader, Withdrawals for $35,000. 
D)  Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000. 
E)  Debit Dina Kader, Withdrawals and credit Dina Kader, Capital for $35,000. 
A)  Debit Income Summary and credit Cash for $35,000. 
B)  Debit Dina Kader, Withdrawals and credit Cash for $35,000. 
C)  Debit Income Summary and credit Dina Kader, Withdrawals for $35,000. 
D)  Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000. 
E)  Debit Dina Kader, Withdrawals and credit Dina Kader, Capital for $35,000.

Question 17

Journalizing and posting closing entries is a required step in the accounting cycle. Explain why it is necessary to close the books at the end of an accounting period.

Accepted Answer

Closing entries are necessary to close t

Question 18

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

Accepted Answer

A)  Nominal accounts. 
B)  Temporary accounts. 
C)  Permanent accounts. 
D)  Contra accounts. 
E)  Accrued accounts. 
A)  Nominal accounts. 
B)  Temporary accounts. 
C)  Permanent accounts. 
D)  Contra accounts. 
E)  Accrued accounts.

Question 19

Bentley records adjusting entries at its December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, at which time $30,000 will be paid. Prepare the journal on January 3 to record payment assuming the correct adjusting and reversing entries were made on December 31 and January 1.

Accepted Answer

A)  Debit Salaries expense $12,000; debit Salaries payable $18,000; credit Cash $30,000. 
B)  Debit Salaries expense $30,000; credit Cash $30,000. 
C)  Debit Salaries payable $30,000; credit Cash $30,000. 
D)  Debit Salaries expense $18,000, debit Salaries payable $12,000; credit Cash $30,000. 
E)  Debit Salaries expense $18,000; credit Cash $18,000. 
A)  Debit Salaries expense $12,000; debit Salaries payable $18,000; credit Cash $30,000. 
B)  Debit Salaries expense $30,000; credit Cash $30,000. 
C)  Debit Salaries payable $30,000; credit Cash $30,000. 
D)  Debit Salaries expense $18,000, debit Salaries payable $12,000; credit Cash $30,000. 
E)  Debit Salaries expense $18,000; credit Cash $18,000.

Question 20

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:

Accepted Answer

The answer of The Adjusted Trial Balance of Bade Cleaning...

Exam 4: Completing the Accounting Cycle

A post-closing trial balance reports:

A ____________________ helps in preparing financial statements, is useful in preparing interim statements, and is helpful in showing the effects of proposed transactions.

The usual order for the asset section of a classified balance sheet is:

Match the following terms with the appropriate definition.

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

A columnar working paper used to prepare a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements, and which is an optional tool in the accounting process is a(n) :

Balance sheet accounts are called ____________________ accounts because they carry their balances to the next accounting period, and are not closed as long as the company continues to own the asset, owe the liability and have equity.

Closing entries result in net income or net loss being transferred to the owner's capital account.

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

The recurring steps performed each reporting period, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

Which of the following statements is ?

When closing entries are made:

The current ratio is computed by dividing current liabilities by current assets.

Dina Kader withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is:

Journalizing and posting closing entries is a required step in the accounting cycle. Explain why it is necessary to close the books at the end of an accounting period.

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

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:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters