Question 1

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Accepted Answer

A) True 
 B)False

Question 2

The normal 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

Question 3

A work sheet is a tool of the accountant for bringing together information needed in preparing the statements, adjusting the accounts, and preparing closing entries.

Accepted Answer

A) True 
 B)False

Question 4

The amounts below appeared in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. In the space provided record the closing entries on December 31 (no explanations are necessary).

Accepted Answer

The answer of The amounts below appeared in the Income...

Question 5

If, in preparing a work sheet, an adjusted trial balance amount is sorted to the wrong work sheet column, the Balance Sheet columns will balance on completing the work sheet, but with the wrong profit, if the amount sorted in error is

Accepted Answer

A)  An expense amount entered in the Balance Sheet Credit column 
B)  A revenue amount entered in the Balance Sheet Debit column 
C)  A liability amount entered in the Income Statement Credit column 
D)  An asset amount entered in the Balance Sheet Credit column 
E)  A liability amount entered in the Balance Sheet Debit column

Question 6

The following account balances are taken from the adjusted trial balance of Best of Fun Bowling Lanes at December 31, 2020.
 
-Prepare a classified balance sheet at December 31, 2020
Best of Fun Bowling Lanes Balance Sheet At December 31, 2020

Accepted Answer

The answer of The following account balances are taken from...

Question 7

Explain why closing entries are a necessary step in the accounting cycle.

Accepted Answer

The answer of Explain why closing entries are a necessary...

Question 8

The ending balance of owner's capital is calculated as

Accepted Answer

A)  Owner's capital account balance plus profit minus the withdrawals account balance 
B)  Owner's capital account balance minus loss plus the withdrawals account balance 
C)  Profit minus the withdrawals account balance 
D)  Assets plus liabilities 
E)  None of these answers is correct.

Question 9

Closing entries are needed at the end of the fiscal period to close all ledger accounts.

Accepted Answer

A) True 
 B)False

Question 10

After posting the entries to close all revenue and expense accounts, Hatfield Company's Income Summary account has a credit balance of $6,000, and the Hatfield, Withdrawals account has a debit balance of $2,500. These balances indicate that profit for the accounting period amounted to $3,500.

Accepted Answer

A) True 
 B)False

Question 11

The asset section of a classified balance sheet includes

Accepted Answer

A)  Current assets, long-term investments, property, plant and equipment, and intangible assets. 
B)  Current assets, non-current assets, equity, and intangible assets. 
C)  Current assets, long-term investments, property, plant and equipment, and withdrawals. 
D)  Current liabilities, long-term investments, property, plant and equipment, and intangible assets. 
E)  Current assets, liabilities, property, plant and equipment, and intangible assets.

Question 12

The first step in the accounting cycle is to analyze and record transactions during the accounting period.

Accepted Answer

A) True 
 B)False

Question 13

Revenue accounts should begin each accounting period with zero balances.

Accepted Answer

A) True 
 B)False

Question 14

Harley Ravidson's current assets are $400 million and its current liabilities are $250 million. Its current ratio is.63 to 1.

Accepted Answer

A) True 
 B)False

Question 15

The following are selected accounts and their balances after adjustments at December 31, 2020, the end of Mark's Furniture Refinishing's fiscal year.
 $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$Mark's Furniture Refinishing 
$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$Trial Balance December 31, 2020
$\begin{array}{|l|r|r|}
\hline & \text { Debit } & \text { Credit } \
\hline \text { Cash } & \$ 1,000 & \
\hline \text { Accounts receivable } & 2,000 & \
\hline \text { Refinishing supplies } & 3,000 &  \
\hline \text { Tools } & 10,000 & \
\hline \text { Accumulated depreciation, tools } & & \$ 11,000\
\hline \text { Accounts payable } & & 3,000 \
\hline \text { Mark Madman, capital } & &  4,000\
\hline \text { Mark Madman, withdrawals } & 2,000 & \
\hline \text { Fees earned } & & 15,750 \
\hline \text { Wages expense } & 4,000 & \
\hline \text { Supplies expense } & 250 & \
\hline \text { Depreciation expense } & 5,500 & \
\hline \text { Utilities expense } & 3,500 &  \
\hline \text { Rental expense } & \underline{2,500} & -\
\hline \text { Total } & \underline{\$ 33,750} &\underline{\$ 33,750}\
\hline
\end{array}$ Prepare the necessary closing entries at December 31. What is the balance of Mark's capital account after the bookkeeper posts the closing entries?

Accepted Answer

The answer of The following are selected accounts and their...

Question 16

The current ratio is used to evaluate the ability of a business to meet its short-term obligations.

Accepted Answer

A) True 
 B)False

Question 17

Emilia Feridy, the proprietor of EF Services, withdrew a total of $50 for to pay for her daughter's swimming lessons. What is the entry needed to record this transaction?

Accepted Answer

A)  Debit Emilia Feridy, Capital and credit Cash for $50. 
B)  Debit Emilia Feridy, Withdrawals and credit Cash for $50. 
C)  Debit Emilia Feridy, Withdrawals and credit Emilia Feridy, Capital for $50. 
D)  Debit Emilia Feridy, Capital and credit Emilia Feridy, Withdrawals for $50. 
E)  Debit Cash and credit Emilia Feridy, Withdrawals for $50.

Question 18

To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet, including the profit or loss.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)  Statement of changes in equity or Balance Sheet-Credit; Statement of changes in equity or Balance Sheet-Debit; and Income Statement-Credit. 
B)  Statement of changes in equity or Balance Sheet-Debit; Statement of changes in equity or Balance Sheet-Credit; and Income Statement-Credit. 
C)  Income Statement-Debit; Statement of changes in equity or Balance Sheet-Debit; and Income Statement-Credit. 
D)  Income Statement-Debit; Income Statement-Debit; and Statement of changes in equity or Balance Sheet-Credit. 
E)  Statement of changes in equity or Balance Sheet-Credit; Income Statement-Debit; and Income Statement-Credit.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 4: Completing the Accounting Cycle and Classifying Accounts

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

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

A work sheet is a tool of the accountant for bringing together information needed in preparing the statements, adjusting the accounts, and preparing closing entries.

The amounts below appeared in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. In the space provided record the closing entries on December 31 (no explanations are necessary).

If, in preparing a work sheet, an adjusted trial balance amount is sorted to the wrong work sheet column, the Balance Sheet columns will balance on completing the work sheet, but with the wrong profit, if the amount sorted in error is

The following account balances are taken from the adjusted trial balance of Best of Fun Bowling Lanes at December 31, 2020. -Prepare a classified balance sheet at December 31, 2020 Best of Fun Bowling Lanes Balance Sheet At December 31, 2020

Explain why closing entries are a necessary step in the accounting cycle.

The ending balance of owner's capital is calculated as

Closing entries are needed at the end of the fiscal period to close all ledger accounts.

After posting the entries to close all revenue and expense accounts, Hatfield Company's Income Summary account has a credit balance of $6,000, and the Hatfield, Withdrawals account has a debit balance of $2,500. These balances indicate that profit for the accounting period amounted to $3,500.

The asset section of a classified balance sheet includes

The first step in the accounting cycle is to analyze and record transactions during the accounting period.

Revenue accounts should begin each accounting period with zero balances.

Harley Ravidson's current assets are $400 million and its current liabilities are $250 million. Its current ratio is.63 to 1.

The current ratio is used to evaluate the ability of a business to meet its short-term obligations.

Emilia Feridy, the proprietor of EF Services, withdrew a total of $50 for to pay for her daughter's swimming lessons. What is the entry needed to record this transaction?

To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet, including the profit or loss.

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

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