Question 1

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries.

Accepted Answer

The answer of The summary amounts below appear in the...

Question 2

A company had revenues of $187,000 and expenses of $109,000 for the accounting period. The owner withdrew $37,000 during the year. Which of the following entries could not be a closing entry?

Accepted Answer

A)  Debit Income Summary $78,000; credit Owner's, Capital $78,000. 
B)  Debit Capital $37,000; credit Withdrawals $37,000. 
C)  Debit Revenues $187,000; credit Income Summary $187,000. 
D)  Debit Income Summary $109,000, credit Expenses $109,000. 
E)  Debit Income Summary $187,000; credit Revenues $187,000. 
A)  Debit Income Summary $78,000; credit Owner's, Capital $78,000. 
B)  Debit Capital $37,000; credit Withdrawals $37,000. 
C)  Debit Revenues $187,000; credit Income Summary $187,000. 
D)  Debit Income Summary $109,000, credit Expenses $109,000. 
E)  Debit Income Summary $187,000; credit Revenues $187,000.

Question 3

A work sheet is a tool to help organize information needed in adjusting the accounts and preparing the financial statements.

Accepted Answer

A) True 
 B)False

Question 4

What is the purpose of a post-closing trial balance?

Accepted Answer

A post-closing trial balance is a list o

Question 5

The purpose of reversing entries is to:

Accepted Answer

A)  simplify the recording of certain journal entries in the future. 
B)  correct an error made in a previous journal entry. 
C)  ensure that closing entries have been properly posted to the ledger accounts. 
D)  make certain that only permanent accounts are carried forward into the next accounting period. 
E)  complete a required step in the accounting cycle. 
A)  simplify the recording of certain journal entries in the future. 
B)  correct an error made in a previous journal entry. 
C)  ensure that closing entries have been properly posted to the ledger accounts. 
D)  make certain that only permanent accounts are carried forward into the next accounting period. 
E)  complete a required step in the accounting cycle.

Question 6

The current portion of long-term debt is classified with the ________________________.

Accepted Answer

The answer of The current portion of long-term debt is...

Question 7

The following information is available for the Travis Travel Agency. After these closing entries what will be the balance in the Jay Travis, Capital account?

Accepted Answer

A)  $65,000. 
B)  $80,000. 
C)  $130,000. 
D)  $145,000. 
E)  $280,000. 
A)  $65,000. 
B)  $80,000. 
C)  $130,000. 
D)  $145,000. 
E)  $280,000.

Question 8

All of the following statements regarding a work sheet are except:

Accepted Answer

A)  A worksheet aids in the preparation of financial statements. 
B)  A worksheet reduces the possibility of errors when working with many accounts and adjustments. 
C)  A worksheet does not assist in planning and organizing an audit of financial statements. 
D)  A worksheet helps in preparing interim financial statements. 
E)  A worksheet shows the effects of proposed or "what-if" transactions. 
A)  A worksheet aids in the preparation of financial statements. 
B)  A worksheet reduces the possibility of errors when working with many accounts and adjustments. 
C)  A worksheet does not assist in planning and organizing an audit of financial statements. 
D)  A worksheet helps in preparing interim financial statements. 
E)  A worksheet shows the effects of proposed or "what-if" transactions.

Question 9

The calendar year-end adjusted trial balance for Acosta Co. follows:
Required:
(a) Prepare a classified year-end balance sheet. (Note: A $7,000 installment on the long-term note payable is due within one year.)
(b) Calculate the current ratio. Comment on the ability of Acosta Co. to meets its short-term debts.

Accepted Answer

(a)
 @#IMG-DLM& *NI = $370,800 - $90,000 - $5,200

Question 10

The Income Summary account is used:

Accepted Answer

A)  To adjust and update asset and liability accounts. 
B)  To close the revenue and expense accounts. 
C)  To determine the appropriate withdrawal amount. 
D)  To replace the income statement under certain circumstances. 
E)  To replace the capital account in some businesses. 
A)  To adjust and update asset and liability accounts. 
B)  To close the revenue and expense accounts. 
C)  To determine the appropriate withdrawal amount. 
D)  To replace the income statement under certain circumstances. 
E)  To replace the capital account in some businesses.

Question 11

Accumulated Depreciation, Accounts Receivable, and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Accepted Answer

A)  Balance Sheet and Statement of Changes in Equity-Credit; Balance Sheet and Statement of Changes in Equity Debit; and Income Statement-Credit. 
B)  Balance Sheet and Statement of Changes in Equity-Debit; Balance Sheet and Statement of Changes in Equity-Credit; and Income Statement-Credit. 
C)  Income Statement-Debit; Balance Sheet and Statement of Changes in Equity-Debit; and Income Statement-Credit. 
D)  Income Statement-Debit; Income Statement-Debit; and Balance Sheet and Statement of Changes in Equity-Credit. 
E)  Balance Sheet and Statement of Changes in Equity-Credit; Income Statement-Debit; and Income Statement-Credit. 
A)  Balance Sheet and Statement of Changes in Equity-Credit; Balance Sheet and Statement of Changes in Equity Debit; and Income Statement-Credit. 
B)  Balance Sheet and Statement of Changes in Equity-Debit; Balance Sheet and Statement of Changes in Equity-Credit; and Income Statement-Credit. 
C)  Income Statement-Debit; Balance Sheet and Statement of Changes in Equity-Debit; and Income Statement-Credit. 
D)  Income Statement-Debit; Income Statement-Debit; and Balance Sheet and Statement of Changes in Equity-Credit. 
E)  Balance Sheet and Statement of Changes in Equity-Credit; Income Statement-Debit; and Income Statement-Credit.

Question 12

Two common subgroups for liabilities on a classified balance sheet are:

Accepted Answer

A)  current liabilities and intangible liabilities. 
B)  present liabilities and operating liabilities. 
C)  general liabilities and specific liabilities. 
D)  intangible liabilities and long-term liabilities. 
E)  current liabilities and long-term liabilities. 
A)  current liabilities and intangible liabilities. 
B)  present liabilities and operating liabilities. 
C)  general liabilities and specific liabilities. 
D)  intangible liabilities and long-term liabilities. 
E)  current liabilities and long-term liabilities.

Question 13

Explain the purpose of reversing entries.

Accepted Answer

Reversing entries are an optional step i

Question 14

A trial balance prepared after the closing entries have been journalized and posted is the:

Accepted Answer

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

Question 15

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

Accepted Answer

The answer of A current ratio of 2.1 suggests that...

Question 16

Employees of Artworld Co. have earned but have not been paid $3,500 in salaries for the last week of the current calendar year.
(a) Prepare the necessary adjusting journal entry(ies) for Artworld at December 31 of the current year.
(b) Assuming that Artworld makes reversing entries, prepare the necessary reversing entry. Include the appropriate date for the reversing entry(ies).

Accepted Answer

The answer of Employees of Artworld Co. have earned but...

Question 17

Closing entries are designed to transfer the end-of-period balances in the revenue accounts, the expense accounts, and the withdrawals account to owner's capital.

Accepted Answer

A) True 
 B)False

Question 18

In the table below, indicate with an "X" in the proper column whether the account is a temporary (nominal) account or a permanent (real) account.

Accepted Answer

The answer of In the table below, indicate with an...

Question 19

Harry's Bikes' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Harry's Bikes can cover its short term liabilities with its short term assets.

Accepted Answer

A) True 
 B)False

Question 20

A classified balance sheet differs from an unclassified balance sheet in that

Accepted Answer

A)  an unclassified balance sheet is never used by large companies. 
B)  a classified balance sheet normally includes only three subgroups. 
C)  a classified balance sheet presents information in a manner that makes it easier to calculate a company's current ratio. 
D)  a classified balance sheet will include more accounts than an unclassified balance sheet for the same company on the same date. 
E)  a classified balance sheet cannot be provided to outside parties. 
A)  an unclassified balance sheet is never used by large companies. 
B)  a classified balance sheet normally includes only three subgroups. 
C)  a classified balance sheet presents information in a manner that makes it easier to calculate a company's current ratio. 
D)  a classified balance sheet will include more accounts than an unclassified balance sheet for the same company on the same date. 
E)  a classified balance sheet cannot be provided to outside parties.

Exam 4: Completing the Accounting Cycle

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries.

A company had revenues of $187,000 and expenses of $109,000 for the accounting period. The owner withdrew $37,000 during the year. Which of the following entries could not be a closing entry?

A work sheet is a tool to help organize information needed in adjusting the accounts and preparing the financial statements.

What is the purpose of a post-closing trial balance?

The purpose of reversing entries is to:

The current portion of long-term debt is classified with the ________________________.

The following information is available for the Travis Travel Agency. After these closing entries what will be the balance in the Jay Travis, Capital account?

All of the following statements regarding a work sheet are except:

The Income Summary account is used:

Accumulated Depreciation, Accounts Receivable, and Service Fees Earned would be sorted to which respective columns in completing a work sheet?

Two common subgroups for liabilities on a classified balance sheet are:

Explain the purpose of reversing entries.

A trial balance prepared after the closing entries have been journalized and posted is the:

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

Closing entries are designed to transfer the end-of-period balances in the revenue accounts, the expense accounts, and the withdrawals account to owner's capital.

In the table below, indicate with an "X" in the proper column whether the account is a temporary (nominal) account or a permanent (real) account.

Harry's Bikes' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Harry's Bikes can cover its short term liabilities with its short term assets.

A classified balance sheet differs from an unclassified balance sheet in that

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

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