Question 1

A classified balance sheet:

Accepted Answer

A)  Measures a company's ability to pay its bills on time. 
B)  Organizes assets and liabilities into important subgroups. 
C)  Presents revenues, expenses, and net income. 
D)  Reports operating, investing, and financing activities. 
E)  Reports the effect of profit and withdrawals on owner's capital. 
A)  Measures a company's ability to pay its bills on time. 
B)  Organizes assets and liabilities into important subgroups. 
C)  Presents revenues, expenses, and net income. 
D)  Reports operating, investing, and financing activities. 
E)  Reports the effect of profit and withdrawals on owner's capital.

Question 2

A work sheet is a substitute for the set of financial statements.

Accepted Answer

A) True 
 B)False

Question 3

Income Summary is a temporary account only used for the closing process.

Accepted Answer

A) True 
 B)False

Question 4

Presented below are the year-end balances at December 31 of Laura's Laundry Service. (All accounts have normal balances.)
(a) Prepare the necessary closing entries at December 31.
(b) Prepare a post-closing trial balance at December 31.

Accepted Answer

The answer of Presented below are the year-end balances at...

Question 5

Closing entries are necessary so that owner's capital will begin each period with a zero balance.

Accepted Answer

A) True 
 B)False

Question 6

Closing entries are normally entered in the general journal and then posted to the work sheet.

Accepted Answer

A) True 
 B)False

Question 7

The adjusted trial balance of Sara's Web Services follows:
(a) Prepare the closing entries for Sara's Web Services.
(b) What is the balance of Sara's capital account after the closing entries are posted?

Accepted Answer

The answer of The adjusted trial balance of Sara's Web...

Question 8

Shown below is Adventure Travel's adjusted trial balance as of the end of its annual accounting period:
(a) Prepare the necessary closing entries.
(b) Prepare a post-closing trial balance.

Accepted Answer

The answer of Shown below is Adventure Travel's adjusted trial...

Question 9

Use the information in the adjusted trial balance presented below to calculate current assets for Jones Company:

Accepted Answer

A)  $21,200. 
B)  $45,600. 
C)  $24,400. 
D)  $95,600. 
E)  $41,200. 
A)  $21,200. 
B)  $45,600. 
C)  $24,400. 
D)  $95,600. 
E)  $41,200.

Question 10

Current liabilities are cash and other resources that are expected to be sold, collected or used within one year or the company's operating cycle whichever is longer.

Accepted Answer

A) True 
 B)False

Question 11

Permanent accounts include all of the following except:

Accepted Answer

A)  Accumulated Depreciation - Equipment. 
B)  Prepaid Rent. 
C)  Unearned Consulting Revenue. 
D)  Accounts Payable. 
E)  Depreciation Expense - Equipment. 
A)  Accumulated Depreciation - Equipment. 
B)  Prepaid Rent. 
C)  Unearned Consulting Revenue. 
D)  Accounts Payable. 
E)  Depreciation Expense - Equipment.

Question 12

A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in:

Accepted Answer

A)  $200 decrease in net income. 
B)  $200 increase in net income. 
C)  $200 difference between the debit and credit columns of the Unadjusted Trial Balance. 
D)  $200 of prepaid insurance. 
E)  An error in the financial statements. 
A)  $200 decrease in net income. 
B)  $200 increase in net income. 
C)  $200 difference between the debit and credit columns of the Unadjusted Trial Balance. 
D)  $200 of prepaid insurance. 
E)  An error in the financial statements.

Question 13

The balances in the unadjusted columns of a work sheet will agree with:

Accepted Answer

A)  the balances reflected in the company's financial statements. 
B)  the balances reflected in the company's unadjusted trial balance. 
C)  whatever balances management has decided to report. 
D)  the balances in the company's post-closing trial balance. 
E)  the balances management budgeted for the accounting period. 
A)  the balances reflected in the company's financial statements. 
B)  the balances reflected in the company's unadjusted trial balance. 
C)  whatever balances management has decided to report. 
D)  the balances in the company's post-closing trial balance. 
E)  the balances management budgeted for the accounting period.

Question 14

Temporary accounts include all of the following except:

Accepted Answer

A)  Consulting revenue. 
B)  Withdrawals. 
C)  Rent expense. 
D)  Prepaid rent. 
E)  Income Summary. 
A)  Consulting revenue. 
B)  Withdrawals. 
C)  Rent expense. 
D)  Prepaid rent. 
E)  Income Summary.

Question 15

Explain the difference between temporary and permanent accounts.

Accepted Answer

Temporary, or nominal, accounts accumula

Question 16

A company's post-closing trial balance has a debit total of $475,000 and a credit total of $457,000. This indicates that _________________________.

Accepted Answer

An error w

Question 17

The ______________ refers to the steps in preparing financial statements for users.

Accepted Answer

The answer of The ______________ refers to the steps in...

Exam 4: Completing the Accounting Cycle

A classified balance sheet:

A work sheet is a substitute for the set of financial statements.

Income Summary is a temporary account only used for the closing process.

Presented below are the year-end balances at December 31 of Laura's Laundry Service. (All accounts have normal balances.) (a) Prepare the necessary closing entries at December 31. (b) Prepare a post-closing trial balance at December 31.

Closing entries are necessary so that owner's capital will begin each period with a zero balance.

Closing entries are normally entered in the general journal and then posted to the work sheet.

The adjusted trial balance of Sara's Web Services follows: (a) Prepare the closing entries for Sara's Web Services. (b) What is the balance of Sara's capital account after the closing entries are posted?

Shown below is Adventure Travel's adjusted trial balance as of the end of its annual accounting period: (a) Prepare the necessary closing entries. (b) Prepare a post-closing trial balance.

Use the information in the adjusted trial balance presented below to calculate current assets for Jones Company:

Current liabilities are cash and other resources that are expected to be sold, collected or used within one year or the company's operating cycle whichever is longer.

Permanent accounts include all of the following except:

A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in:

The balances in the unadjusted columns of a work sheet will agree with:

Temporary accounts include all of the following except:

Explain the difference between temporary and permanent accounts.

A company's post-closing trial balance has a debit total of $475,000 and a credit total of $457,000. This indicates that _________________________.

The ______________ refers to the steps in preparing financial statements for users.

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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