Deck 6: Completing a Worksheet and Completing the Accounting Cycle

Question 1

After a worksheet has been completed, the statement columns contain all data that are required for the preparation of financial statements.

Answer 1

True

Question 2

The balance of the depreciation expense account will appear in the income statement debit column of a worksheet.

Answer 2

True

Question 3

It is not necessary to prepare formal financial statements if a worksheet has been prepared because the financial position and net income are shown on the worksheet.

Answer 3

False

Question 4

If a worksheet is used, financial statements can be prepared before adjusting entries are journalized.

Question 5

The balance of Accounts Receivable will appear in the balance sheet debit column of a worksheet.

Question 6

A worksheet is a mandatory form that must be prepared along with an income statement and balance sheet.

Question 7

After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.

Question 8

If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has a net loss.

Question 9

Closing the drawings account to Owner's Capital is not necessary if net income is greater than owner's drawings during the period.

Question 10

The adjustments on a worksheet can be posted directly to the accounts in the ledger from the worksheet.

Question 11

The owner's drawings account is a permanent account whose balance is carried forward to the next accounting period.

Question 12

If total credits in the income statement columns of a worksheet exceed total debits, the enterprise has net income.

Question 13

The balance of the salaries and wages payable account will appear in the balance sheet debit column of a worksheet.

Question 14

The owner's drawings account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Question 15

The balance of the accumulated depreciation account will appear in the income statement debit column of a worksheet.

Question 16

The balance of the salaries and wages expense account will appear in the income statement credit column of a worksheet.

Question 17

The balance of Accumulated Depreciation will appear in the balance sheet credit column of a worksheet.

Question 18

Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.

Question 19

Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statements each year.

Question 20

The adjusted trial balance columns of a worksheet are obtained by subtracting the adjustment columns from the trial balance columns.

Question 21

A business entity has only one accounting cycle over its economic existence.

Question 22

The post-closing trial balance is entered in the first two columns of a worksheet.

Question 23

These accounts are among the accounts in Sportsline's adjusted trial balance in the worksheet: $\begin{array}{lr}\text { Accumulated depreciation } & \$ 15,000 \\\text { Depreciation expense } & 5,000 \\\text { Insurance expense } & 3,000 \\\text { Prepaid Insurance } & 6,000 \\\text { Salaries \& wages expense } & 20,000 \\\text { Salaries \& wages payable } & 7,000\end{array}$ What is the total in the income statement debit column, based only on these accounts?

A) $28,000.
B) $34,000.
C) $44,000.
D) $49,000.

Question 24

To close a net loss to owner's capital, Income Summary is debited and Owner's Capital is credited.

Question 25

The post-closing trial balance will contain only owner's equity statement accounts and balance sheet accounts.

Question 26

An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.

Question 27

Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.

Question 28

Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.

Question 29

The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.

Question 30

Correcting entries always affect at least one balance sheet account and one income statement account.

Question 31

The accounting cycle begins at the start of a new accounting period.

Question 32

These accounts are among the accounts in Sportsline's adjusted trial balance in the worksheet: $\begin{array}{lr}\text { Accounts payable } & \$ 15,000 \\\text { Accounts receivable } & 19,000 \\\text { Cash } & 9,000 \\\text { Equipment } & 30,000 \\\text { Notes payable } & 10,000 \\\text { Owner's Capital } & 33,000\end{array}$ What are the total debits in the adjusted trial balance in the worksheet, based only on these accounts?

A) $39,000.
B) $54,000.
C) $58,000.
D) $91,000.

Question 33

The post-closing trial balance is prepared to prove the equality of debits and credits in the ledger after closing entries have been journalized and posted.

Question 34

The entry to close the Retained Earnings account includes a debit to net income.

Question 35

The worksheet is

A) a device used in preparing adjusting entries and the financial statements.
B) a journal.
C) a part of the general ledger.
D) a permanent accounting record.

Question 36

Only balance sheet accounts will have balances in the post-closing trial balance.

Question 37

These accounts are among the accounts in Sportsline's adjusted trial balance in the worksheet: $\begin{array}{lr}\text { Accounts payable } & \$ 15,000 \\\text { Accounts receivable } & 19,000 \\\text { Cash } & 9,000 \\\text { Equipment } & 30,000 \\\text { Notes payable } & 10,000 \\\text { Owner's Capital } & 33,000\end{array}$ What are the total credits in the adjusted trial balance in the worksheet, based only on these accounts?

A) $25,000.
B) $58,000.
C) $62,000.
D) $77,000.

Question 38

Which is not true about the worksheet?

A) It is a multiple-column form used in the adjustment process and in preparing financial statements.
B) It is a working tool.
C) It is a permanent accounting record.
D) It is neither a journal nor a part of the general ledger.

Question 39

To close net income to owner's capital, Income Summary is debited and Owner's Capital is credited.

Question 40

Closing entries are journalized after adjusting entries have been journalized.

Question 41

Kenham Co. was organized on April 1, 2022. The company prepares monthly financial statements. The adjusted trial balance amounts in the April 30 worksheet are shown below.
$\begin{array}{lrlrr}&\text { Debit}&&\text {Credit }\\\hline\text { Cash } & \$ 6,700 & \text { Accumulated Depreciation- } & \\\text { Accounts Receivable } & 600 & \text { Equipment } & 850 \\\text { Prepaid Insurance } & 1,800 & \text { Notes Payable } & 5,000 \\\text { Supplies } & 1,000 & \text { Accounts Payable } & 1,510 \\\text { Equipment } & 15,000 & \text { Salaries and Wages Payable } & 400\\\text { Owner's Drawings } & 600 & \text { Interest Payable } & 550 \\\text { Salaries and Wages Expense } & 9,400 & \text { Owner's Capital } & 13,000 \\\text { Insurance Expense } & 1,200 & \text { Service Revenue } & 15,800 \\\text { Depreciation Expense } & 850 & \text { Rent Revenue } & 800\\\text { Supplies Expense } & 200 \\\text { Utilities Expense } & 510 \\\text { Interest Expense } & 50\\&\$37,910&&\$37,910\end{array}$
What will be the total in the balance sheet debit column?

A) $ 24,250
B) $ 25,100
C) $ 25,300
D) $ 25,700

Question 42

Kenham Co. was organized on April 1, 2022. The company prepares monthly financial statements. The adjusted trial balance amounts in the April 30 worksheet are shown below.

Question 43

Which is true about the worksheet?

A) Companies generally computerize worksheets using a program such as Word.
B) Companies generally computerize worksheets using a spreadsheet program such as Excel.
C) The use of a worksheet is required.
D) When a company chooses to use a worksheet, it cannot prepare financial statements directly from the worksheet.

Question 44

If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has

A) earned net income for the period.
B) an error because debits do not equal credits.
C) suffered a net loss for the period.
D) to make an adjusting entry.

Question 45

When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should these additional accounts be shown on the worksheet?

A) They should be inserted in alphabetical order into the trial balance accounts already given.
B) They should be inserted in chart of account order into the trial balance already given.
C) They should be inserted on the lines immediately below the trial balance totals.
D) They should not be inserted on the trial balance until the next accounting period.

Question 46

Kenham Co. was organized on April 1, 2022. The company prepares monthly financial statements. The adjusted trial balance amounts in the April 30 worksheet are shown below.
$\begin{array}{lrlrr}&\text { Debit}&&\text {Credit }\\\hline\text { Cash } & \$ 6,700 & \text { Accumulated Depreciation- } & \\\text { Accounts Receivable } & 600 & \text { Equipment } & 850 \\\text { Prepaid Insurance } & 1,800 & \text { Notes Payable } & 5,000 \\\text { Supplies } & 1,000 & \text { Accounts Payable } & 1,510 \\\text { Equipment } & 15,000 & \text { Salaries and Wages Payable } & 400\\\text { Owner's Drawings } & 600 & \text { Interest Payable } & 550 \\\text { Salaries and Wages Expense } & 9,400 & \text { Owner's Capital } & 13,000 \\\text { Insurance Expense } & 1,200 & \text { Service Revenue } & 15,800 \\\text { Depreciation Expense } & 850 & \text { Rent Revenue } & 800\\\text { Supplies Expense } & 200 \\\text { Utilities Expense } & 510 \\\text { Interest Expense } & 50\\&\$37,910&&\$37,910\end{array}$
In which worksheet column will the net income amount be entered?

A) Adjusted trial balance debit.
B) Income statement credit.
C) Balance sheet credit.
D) Balance sheet debit.

Question 47

When a worksheet is used, adjusting entries are prepared from

A) source documents.
B) the adjustments columns of the worksheet.
C) the general ledger.
D) last year's worksheet.

Question 48

The adjustments entered in the adjustments columns of a worksheet are

A) not journalized.
B) posted to the ledger but not journalized.
C) not journalized until after the financial statements are prepared.
D) journalized before the worksheet is completed.

Question 49

Kenham Co. was organized on April 1, 2022. The company prepares monthly financial statements. The adjusted trial balance amounts in the April 30 worksheet are shown below.
$\begin{array}{lrlrr}&\text { Debit}&&\text {Credit }\\\hline\text { Cash } & \$ 6,700 & \text { Accumulated Depreciation- } & \\\text { Accounts Receivable } & 600 & \text { Equipment } & 850 \\\text { Prepaid Insurance } & 1,800 & \text { Notes Payable } & 5,000 \\\text { Supplies } & 1,000 & \text { Accounts Payable } & 1,510 \\\text { Equipment } & 15,000 & \text { Salaries and Wages Payable } & 400\\\text { Owner's Drawings } & 600 & \text { Interest Payable } & 550 \\\text { Salaries and Wages Expense } & 9,400 & \text { Owner's Capital } & 13,000 \\\text { Insurance Expense } & 1,200 & \text { Service Revenue } & 15,800 \\\text { Depreciation Expense } & 850 & \text { Rent Revenue } & 800\\\text { Supplies Expense } & 200 \\\text { Utilities Expense } & 510 \\\text { Interest Expense } & 50\\&\$37,910&&\$37,910\end{array}$
What is the total in the balance sheet credit column (not including net income)?

A) $ 7,460
B) $ 8,310
C) $ 9,110
D) $ 21,310

Question 50

When using a worksheet, adjusting entries are journalized

A) after the worksheet is completed and before financial statements are prepared.
B) before the adjustments are entered on to the worksheet.
C) after the worksheet is completed and after financial statements have been prepared.
D) before the adjusted trial balance is extended to the proper financial statement columns.

Question 51

The information for preparing a trial balance on a worksheet is obtained from

A) financial statements.
B) general ledger accounts.
C) general journal entries.
D) business documents.

Question 52

Kenham Co. was organized on April 1, 2022. The company prepares monthly financial statements. The adjusted trial balance amounts in the April 30 worksheet are shown below.
$\begin{array}{lrlrr}&\text { Debit}&&\text {Credit }\\\hline\text { Cash } & \$ 6,700 & \text { Accumulated Depreciation- } & \\\text { Accounts Receivable } & 600 & \text { Equipment } & 850 \\\text { Prepaid Insurance } & 1,800 & \text { Notes Payable } & 5,000 \\\text { Supplies } & 1,000 & \text { Accounts Payable } & 1,510 \\\text { Equipment } & 15,000 & \text { Salaries and Wages Payable } & 400\\\text { Owner's Drawings } & 600 & \text { Interest Payable } & 550 \\\text { Salaries and Wages Expense } & 9,400 & \text { Owner's Capital } & 13,000 \\\text { Insurance Expense } & 1,200 & \text { Service Revenue } & 15,800 \\\text { Depreciation Expense } & 850 & \text { Rent Revenue } & 800\\\text { Supplies Expense } & 200 \\\text { Utilities Expense } & 510 \\\text { Interest Expense } & 50\\&\$37,910&&\$37,910\end{array}$
What is net income for April?

A) $ 3,540
B) $ 3,790
C) $ 4,390
D) $ 5,240

Question 53

Preparing a worksheet involves

A) two steps.
B) three steps.
C) four steps.
D) five steps.

Question 54

Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?

A) Large company with numerous accounts
B) Small company with numerous accounts
C) All companies, since worksheets are required under generally accepted accounting principles
D) Small company with few accounts

Question 55

After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the

A) adjusted trial balance.
B) post-closing trial balance.
C) the general journal.
D) adjustments columns of the worksheet.

Question 56

A worksheet is a multiple column form that facilitates the

A) identification of events.
B) measurement process.
C) preparation of financial statements.
D) analysis process.

Question 57

These accounts are among the accounts in Sportsline's adjusted trial balance in the worksheet: $\begin{array}{lr}\text { Accumulated depreciation } & \$ 15,000 \\\text { Depreciation expense } & 5,000 \\\text { Insurance expense } & 3,000 \\\text { Prepaid Insurance } & 6,000 \\\text { Salaries \& wages expense } & 20,000 \\\text { Salaries \& wages payable } & 7,000\end{array}$ What is the total in the balance sheet credit column, based only on these accounts?

A) $ 7,000.
B) $12,000.
C) $18,000.
D) $22,000.

Question 58

A worksheet can be thought of as a(n)

A) permanent accounting record.
B) optional device used by accountants.
C) part of the general ledger.
D) part of the journal.

Question 59

Assuming that there is a net loss for the period, debits equal credits in all but which section of the worksheet?

A) Income statement columns
B) Adjustments columns
C) Trial balance columns
D) Adjusted trial balance columns

Question 60

The account, Supplies, will appear in the following debit columns of the worksheet

A) trial balance.
B) adjusted trial balance.
C) balance sheet.
D) All of these answer choices are correct

Question 61

The worksheet does not show

A) net income or loss for the period.
B) revenue and expense account balances.
C) the ending balance in the owner's capital account.
D) the trial balance before adjustments.

Question 62

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals:

Question 63

Closing entries are necessary for

A) permanent accounts only.
B) temporary accounts only.
C) both permanent and temporary accounts.
D) permanent or real accounts only.

Question 64

If the total debits exceed total credits in the balance sheet columns of the worksheet, owner's equity

A) will increase because net income has occurred.
B) will decrease because a net loss has occurred.
C) is in error because a mistake has occurred.
D) will not be affected.

Question 65

Which of the following is an optional step in the accounting cycle?

A) Adjusting entries
B) Closing entries
C) Correcting entries
D) Worksheet

Question 66

Which one of the following is an optional step in the accounting cycle of a business enterprise?

A) Analyze business transactions
B) Prepare a worksheet
C) Prepare a trial balance
D) Post to the ledger accounts

Question 67

The net income (or loss) for the period

A) is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.
B) cannot be found on the worksheet.
C) is found by computing the difference between the income statement columns of the worksheet.
D) is found by computing the difference between the trial balance totals and the adjusted trial balance totals.

Question 68

Closing entries are journalized and posted

A) before the financial statements are prepared.
B) after the financial statements are prepared.
C) at management's discretion.
D) at the end of each interim accounting period.

Question 69

If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a

A) debit to the owner's capital account.
B) debit to the owner's drawings account.
C) credit to the owner's capital account.
D) credit to the owner's drawings account.

Question 70

Income Summary has a credit balance of $19,000 in B. Browne Co. after closing revenues and expenses. The entry to close Income Summary is

A) credit Income Summary $19,000, debit Owner's Capital $19,000.
B) credit Income Summary $19,000, debit Owner's Drawings $19,000.
C) debit Income Summary $19,000, credit Owner's Drawings $19,000.
D) debit Income Summary $19,000, credit Owner's Capital $19,000.

Question 71

The optional step in the accounting cycle is preparing

A) a post-closing trial balance.
B) closing entries.
C) a worksheet.
D) an adjusted trial balance.

Question 72

The income summary account

A) is a permanent account.
B) appears on the balance sheet.
C) appears on the income statement.
D) is a temporary account.

Question 73

Closing entries are

A) an optional step in the accounting cycle.
B) posted to the ledger accounts from the worksheet.
C) made to close permanent or real accounts.
D) journalized in the general journal.

Question 74

Closing entries

A) are prepared before the financial statements.
B) reduce the number of permanent accounts.
C) cause the revenue and expense accounts to have zero balances.
D) summarize the activity in every account.

Question 75

The steps in the preparation of a worksheet do not include

A) analyzing documentary evidence.
B) preparing a trial balance on the worksheet.
C) entering the adjustments in the adjustment columns.
D) entering adjusted balances in the adjusted trial balance columns.

Question 76

Each of the following accounts is closed to Income Summary except

A) Expenses.
B) Owner's Drawings.
C) Revenues.
D) All of these are closed to Income Summary.

Question 77

The post-closing trial balance contains only

A) income statement accounts.
B) balance sheet accounts.
C) balance sheet and income statement accounts.
D) income statement, balance sheet, and owner's equity statement accounts.

Question 78

Balance sheet accounts are considered to be

A) temporary owner's equity accounts.
B) permanent accounts.
C) capital accounts.
D) nominal accounts.

Question 79

Closing entries are made

A) in order to terminate the business as an operating entity.
B) so that all assets, liabilities, and owner's capital accounts will have zero balances when the next accounting period starts.
C) in order to transfer net income (or loss) and owner's drawings to the owner's capital account.
D) so that financial statements can be prepared.

Question 80

The income statement and balance sheet columns of Beer and Nuts Company's worksheet reflect the following totals: To enter the net income (or loss) for the period into the above worksheet requires an entry to the

A) income statement debit column and the balance sheet credit column.
B) income statement credit column and the balance sheet debit column.
C) income statement debit column and the income statement credit column.
D) balance sheet debit column and the balance sheet credit column.