Deck 4: Supplement - Closing Entries and the Work Sheet

Question 1

When the Balance Sheet columns of the work sheet are initially footed,they should be out of balance by the amount of net income or net loss.

Answer 1

True

Question 2

When the Income Statement columns of the work sheet are initially footed,they should be out of balance by the amount of net income or net loss.

Answer 2

True

Question 3

When preparing the closing entry for all expense accounts,the Income Summary account should be debited for the amount of all expenses.

Answer 3

True

Question 4

An important use of the work sheet is as an aid in the preparation of the closing journal entries.

Question 5

The Adjustments columns of the work sheet are prepared by combining the Trial Balance and Adjusted Trial Balance columns of the work sheet.

Question 6

Despite the many uses of microcomputers,they cannot be used to prepare work sheets.

Question 7

The process of crossfooting requires horizontal addition and subtraction.

Question 8

The heading of a work sheet might include the line "For the Year Ended December 31,2013."

Question 9

Working papers provide a written record of the work performed by the accountant.

Question 10

The balances of the Accumulated Depreciation accounts will appear on the credit side of the work sheet's Balance Sheet columns.

Question 11

The work sheet is a type of source document.

Question 12

The first step to preparing closing journal entries is to close the credit balance on the income statement to the Retained Earnings account.

Question 13

The amount for Dividends will appear in the Income Statement columns of a work sheet.

Question 14

When adjusting entries are entered onto a work sheet,it is not necessary to record them in the general journal.

Question 15

The amount of net income for the period can be found on the work sheet.

Question 16

All credit balance accounts on the income statement are revenue accounts.

Question 17

A work sheet is more useful for a large company than for a small one.

Question 18

The work sheet should be prepared after the formal financial statements have been prepared.

Question 19

On a work sheet,the balance of Retained Earnings is its ending amount for the period.

Question 20

The final step when preparing closing entries is to close the Dividends account to the Retained Earnings account.

Question 21

When a company has earned a net income,the net income amount is entered on the work sheet on the

A) credit side of the Income Statement columns and the debit side of the Balance Sheet columns.
B) debit side of both the Income Statement and the Balance Sheet columns.
C) debit side of the Income Statement columns and the credit side of the Balance Sheet columns.
D) credit side of both the Income Statement and the Balance Sheet columns.

Question 22

The process of crossfooting on the work sheet results in the

A) Adjusted Trial Balance columns.
B) Financial Statements.
C) Income Statement columns.
D) Balance Sheet columns.

Question 23

Closing entries may be prepared by referring to the Income Statement columns and the Dividends column of the work sheet.

Question 24

On the work sheet,under what circumstances will the last two columns be in balance after the initial footing?

A) When no adjustments have been entered on the work sheet
B) Under all circumstances,assuming no arithmetical errors have been made
C) Under no circumstances
D) When net income is zero

Question 25

The amount extended to the Retained Earnings line in the Balance Sheet column of the work sheet is not the amount to be reflected for Retained Earnings on the balance sheet.

Question 26

Which of the following accounts most likely would have an amount contained in the Income Statement columns of a work sheet?

A) Common Stock
B) Accounts Receivable
C) Dividends
D) Interest Expense

Question 27

The total assets and the total liabilities and stockholders' equity on the balance sheet are the same as the totals of the Balance Sheet columns on the work sheet.

Question 28

The work sheet is prepared after the formal adjusting and closing entries.

Question 29

The amount of Retained Earnings for the balance sheet is obtained from the

A) Statement of retained earnings.
B) Adjustments columns of the work sheet.
C) Balance Sheet columns of the work sheet.
D) Income Statement columns of the work sheet.

Question 30

When a company has suffered a net loss,the net loss amount is entered on the work sheet on the

A) credit side of the Income Statement columns and the debit side of the Balance Sheet columns.
B) debit side of both the Income Statement and the Balance Sheet columns.
C) credit side of both the Income Statement and the Balance Sheet columns.
D) debit side of the Income Statement columns and the credit side of the Balance Sheet columns.

Question 31

In the completed work sheet,which set of columns usually should be out of balance after the initial footing?

A) Both Income Statement and Balance Sheet columns
B) Both Trial Balance and Income Statement columns
C) Adjusted Trial Balance columns only
D) Adjustments columns only

Question 32

Typically,formal adjusting entries

A) are prepared prior to completion of the work sheet.
B) are prepared at the same time as closing entries.
C) need not be prepared if a work sheet has been completed.
D) are entered directly into the ledger.

Question 33

Which work sheet columns should contain "key letters"?

A) Adjustments
B) Income Statement
C) Trial Balance
D) Balance Sheet

Question 34

In a manual system which uses a work sheet,the preparation of adjusting entries

A) typically precedes the preparation of the financial statements.
B) typically precedes preparation of the work sheet.
C) is easy because they are simply copied from the work sheet.
D) is difficult,and therefore they must first be entered into the general journal in pencil.

Question 35

Which of the following is the most useful aid to the accountant in preparing closing entries?

A) Trial Balance
B) Work sheet
C) Journal
D) Financial statements

Question 36

Which of the following accounts will have an amount in the Adjustments columns of the work sheet but probably not in the Trial Balance columns?

A) Accounts Receivable
B) Accumulated Depreciation-Equipment
C) Depreciation Expense-Equipment
D) Revenue from Services

Question 37

On the work sheet,account balances are "extended" from the

A) Income Statement and Balance Sheet columns to the financial statements.
B) Adjusted Trial Balance columns to the Income Statement or Balance Sheet columns.
C) Trial Balance columns to the Adjusted Trial Balance columns.
D) Trial Balance and Adjustments columns to the Adjusted Trial Balance columns.

Question 38

A work sheet is useful for all except which of the following?

A) Recording transactions from source documents
B) Recording closing entries
C) Recording adjusting entries
D) Preparing financial statements

Question 39

In preparing closing entries,which of the following columns of the work sheet are the most helpful?

A) Adjustments columns
B) Income Statement columns
C) Adjusted Trial Balance columns
D) Balance Sheet columns

Question 40

The balance sheet cannot be prepared by referring solely to the Balance Sheet columns of the work sheet.

Question 41

The Trial Balance and Adjusted Trial Balance columns of Owen Cleaning Corporation's work sheet are shown below.(The Adjustments columns have been omitted.)Using this information,prepare the post-closing trial balance for Owen Cleaning Corporation as of June 30,2013.

Question 42

Presented below are the Retained Earnings,Dividends,and Income Summary accounts for Shawano Company for the year ended December 31,2013.Closing entries have been entered and posted.Prepare a statement of retained earnings.

Question 43

In preparing adjustments on the work sheet,which of the following accounts most likely would not be added to the Account Name column?

A) Cash
B) Interest Receivable
C) Interest Income
D) Rent Expense

Question 44

An amount would not appear along the Dividends account line in which of the following work sheet columns?

A) Income Statement
B) Balance Sheet
C) Trial Balance
D) Adjusted Trial Balance

Question 45

Which of the following accounts most likely would have an amount contained in every set of columns but the Balance Sheet columns of a work sheet?

A) Dividends
B) Depreciation Expense
C) Unearned Revenue
D) Wages Expense

Question 46

Use this information from the Income Statement columns of the work sheet of Oneida Landscape Service to answer the following question. The entry to close the Laundry Revenue account would be

A) Landscape Revenue 5,000
Income Summary 5,000
B) Income Summary 5,000
Landscape Revenue 5,000
C) Retained Earnings 5,000
Income Summary 5,000
D) Retained Earnings 5,000
Landscape Revenue 5,000

Question 47

Why would a large company probably benefit more from a work sheet than would a very small company?

Question 48

Prepare closing entries for December from the following Income Statement columns of the work sheet of Custom Cleaning Service,Inc.,assuming that a $500 dividend was paid during the period (omit explanations).

Question 49

From the following items in the Income Statement columns of the work sheet of Dane Corporation,prepare the closing entries at December 31,assuming that a $100 dividend was paid during the period (omit explanations).

Question 50

Which of the following accounts probably would have a smaller balance in the Adjusted Trial Balance columns of a work sheet than in the Trial Balance columns?

A) Office Supplies
B) Utilities Payable
C) Accumulated Depreciation-Equipment
D) Rent Expense

Question 51

The work sheet is prepared

A) after the formal closing entries have been entered into the journal.
B) before the preparation of a formal trial balance.
C) after the formal adjusting entries have been entered into the journal.
D) before the preparation of formal financial statements.

Question 52

Omitting key letters in the work sheet would make which of the following difficult?

A) The preparation of the trial balance columns
B) The preparation of the closing entries
C) The preparation of the adjusting entries
D) Crossfooting to the adjusted trial balance columns

Question 53

Which account that does not appear on the balance sheet has an amount in the Balance Sheet columns of a work sheet?

A) Dividends
B) Rent Expense
C) Retained Earnings
D) Accounts Receivable

Question 54

An amount for Retained Earnings would not appear in which of the following work sheet columns?

A) Trial Balance
B) Income Statement
C) Balance Sheet
D) Adjusted Trial Balance

Question 55

In preparing adjustments on the work sheet,which of the following accounts most likely would be added to the Account Name column?

A) Telephone Expense
B) Retained Earnings
C) Income Taxes Payable
D) Accumulated Depreciation-Equipment

Question 56

From the following items in the Income Statement columns of the work sheet of ElKay Corporation,prepare the closing entries at December 31,assuming that a $75 dividend was paid during the period (omit explanations).

Question 57

Use this information from the Income Statement columns of the work sheet of Oneida Landscape Service to answer the following question. The entry to close Income Summary would be

A) Income Summary 5,000
Retained Earnings 5,000
B) Common Stock 1,400
Income Summary 1,400
C) Income Summary 1,400
Retained Earnings 1,400
D) Income Summary 1,400
Common Stock 1,400

Question 58

Use this information from the Income Statement columns of the work sheet of Oneida Landscape Service to answer the following question. The entry to close the expense accounts would be

A) All Expenses 3,600
Retained Earnings 3,600
B) All Expenses 3,600
Income Summary 3,600
C) Income Summary 3,600
All Expenses 3,600
D) Retained Earnings 3,600
All Expenses 3,600

Question 59

Monty Milko is the only accountant employed at Gamma Enterprises,Inc.When asked by the company president if the financial statements had been prepared yet,Milko answered that he had completed all of his work except the preparation of the statements.He added that the net income that would appear on the current income statement would be $369,075.Identify the two instances where Milko would have learned the net income before he actually prepared the income statement.

Question 60

An important reason to use a work sheet is to

A) aid the accountant in the daily preparation of journal entries.
B) replace the journal when making adjusting and closing entries.
C) check the accuracy of adjusting entries before they are entered formally into the accounting records.
D) accompany the financial statements in the company's annual report.

Question 61

The Trial Balance and Adjusted Trial Balance columns of Roland Cleaning Corporation's work sheet are shown below.(The Adjustments columns have been omitted.)In the journal provided,prepare the seven adjusting entries and the four closing entries for the month ended June 30,2013.Omit explanations.

Question 62

Using the information below from the Income Statement and Balance Sheet columns of Tople Corporation's work sheet for the month ended April 30,2013,prepare the income statement,statement of retained earnings,and balance sheet.