Question 1

A credit balance in the income summary account after closing revenues and expenses indicates a net income for the current period.

Accepted Answer

A) True 
 B)False

Question 2

After all the account balances have been extended to the balance sheet columns of the worksheet, the totals of the debit and credit columns are $35,350 and $38,750, respectively. It can be concluded the company has a:

Accepted Answer

A) net income of $3,400. 
B) net loss of $3,400. 
C) $74,100 net loss. 
D) $74,100 net income.

Question 3

Jonathan Swift Movers had the following current ratios 2.2:1; 2.5:1; 2.8:1 for 2017, 2018, 2019 respectively. Which of the following statements most correctly depicts the change in liquidity?

Accepted Answer

A) Liquidity is improving from selling office supplies. 
B) Liquidity is improving due to accounts receivable being collected more quickly. 
C) Liquidity is deteriorating due to purchasing equipment. 
D) Liquidity is improving due to cash received in exchange of a long-term note payable.

Question 4

After all the account balances have been extended to all columns of the worksheet, the totals of the debit and credit columns for the income statement columns are $35,350 and $38,750, respectively. It can be concluded the company has a:

Accepted Answer

A) net income of $3,400. 
B) net loss of $3,400. 
C) $74,100 net loss. 
D) $74,100 net income.

Question 5

If the amount of net income for the current period exceeds the amount of the owner's withdrawals, there will be a(n):

Accepted Answer

A) decrease in the cash account. 
B) increase in the owner's capital account. 
C) decrease in the owner's capital account. 
D) increase in the cash account.

Question 6

Owner withdrawals for the current period are closed to:

Accepted Answer

A) the cash account. 
B) the income summary account. 
C) the owner's capital account. 
D) the revenue accounts.

Question 7

The prepaid rent account has a balance that is $400 less in the worksheet's balance sheet debit column than in the worksheet's trial balance debit column. This would be the result of a:

Accepted Answer

A) $400 entry to prepaid rent in the worksheet's adjustments debit column. 
B) $400 entry to prepaid rent in the worksheet's adjustments credit column. 
C) $400 entry to rent expense in the worksheet's adjustments credit column. 
D) mistake in cross-adding the worksheet.

Question 8

A review of the accounting records discovered that unearned rent revenue received from a client in the amount of $1,500 had been incorrectly recorded as $2,200. Which of the following journal entries will correct the ledger accounts?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Rent revenue } & 700 & \
\hline \text { Cash } & & 700 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Accounts payable } & 700 & \
\hline \text { Rentrevenue } & & 700 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | r | r | } 
\hline \text { Rent revenue } & 700 & \
\hline \text { Uneamed rent revenue } & & 700 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Unearned rent revenue } & 700 & \
\hline \text { Cash } & & 700 \
\hline
\end{array}$$

Question 9

The entry to close the withdrawals account would include a credit to the income summary account.

Accepted Answer

A) True 
 B)False

Question 10

Given the following adjusted account balances in random order, prepare the closing entries for Sheer Fabrics on December 31, 2019. $$\begin{array} { l r } 
\text { Cash } & 35,000 \
\text { Suzie Sheer, Capital } & 85,000 \
\text { Accounts payable } & 33,000 \
\text { Service revenue } & 84,000 \
\text { Amortization expense-building } & 12,000 \
\text { Salary expense } & 29,000 \
\text { Unearned service revenue } & 24,000 \
\text { Prepaid rent } & 9,000 \
\text { Supplies expense } & 6,000 \
\text { Note payable } & 71,000 \
\text { Land } & 65,000 \
\text { Accounts receivable } & 32,000 \
\text { Accum. amortization-building } & 12,000 \
\text { Interest revenue } & 14,000 \
\text { Interest payable } & 3,000 \
\text { Suzie Sheer, Withdrawals } & 20,000 \
\text { Rent expense } & 15,000 \
\text { Building } & 95,000 \
\text { Supplies } & 4,000 \
\text { Interest expense } & 4,000
\end{array}$$

Accepted Answer

The answer of Given the following adjusted account balances in...

Question 11

Net income appears on the worksheet:

Accepted Answer

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

Question 12

The accounts that appear on a post-closing trial balance are:

Accepted Answer

A) assets, liabilities, withdrawals, and revenues. 
B) revenues, expenses, and capital. 
C) assets, liabilities, and expenses. 
D) assets, liabilities, and capital.

Question 13

The income statement debit column exceeds the income statement credit column on a worksheet. This indicates:

Accepted Answer

A) a net income for the company. 
B) a net loss for the company. 
C) that mistakes were made in the preparation of the worksheet. 
D) the owner's capital account increased during the period.

Question 14

When a journal entry contains an error and the error is detected before posting, the entry can be corrected.

Accepted Answer

A) True 
 B)False

Question 15

The net income or loss for the period is placed on the worksheet to balance which sets of columns?

Accepted Answer

A) the adjusted trial balance and the income statement columns 
B) the income statement and the balance sheet columns 
C) the balance sheet and the adjusted trial balance columns 
D) the unadjusted trial balance and the adjusted trial balance columns

Question 16

On a worksheet, the sum of the income statement debit column exceeds the sum of the income statement credit column. This indicates the company generated a net loss during the current period.

Accepted Answer

A) True 
 B)False

Question 17

Table 4-3
Selected accounting data for the Mariot Services follows: $$\begin{array} { | l | r | } 
\hline \text { Current assets } & \$ 59,000 \
\hline \text { Current liabilities } & 20,000 \
\hline \text { Long-term assets } & 70,000 \
\hline \text { Long-term liabilities } & 37,000 \
\hline \text { Total revenues } & 25,000 \
\hline \text { Total expenses } & 22,000 \
\hline
\end{array}$$
-Referring to Table 4-3, the current ratio is:

Accepted Answer

A) 1.13. 
B) 2.95. 
C) 2.26. 
D) 0.34.

Question 18

Based on the following adjusted trial balance, prepare an income statement for Summers Company for the year ended December 31, 2019. $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text {Summers Company}$
$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text {Adjusted Trial Balance}$
$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text {December 31, 2019}$
$\begin{array}{lrr} 
& \text { Debit } & \text { Credit } \
\text { Cash } & \$ 10,500 & \
\text { Accounts receivable } & 20,000 & \
\text { Supplies } & 2,700 & \
\text { Office fumiture } & 10,000 & \
\text { Accum. amort. -office furniture } & & \$ 4,350 \
\text { Salary payable } & & 760 \
\text { Unearned service revenue } & & 1,140 \
\text { Jody Summers, Capital } & & 12,550 \
\text { Jody Summers, Withdrawals } & 2,800 & \
\text { Service revenue } & & 40,060 \
\text { Salary expense } & 8,360 & \
\text { Rent expense } & 2,850 & \
\text { Amort expense-office furn. } & 350 & \
\text { Supplies expense } & \underline{1,300} &\underline{\quad\quad}  \
 \text { Total } & \$ 58,860 & \$ 58,860
\end{array}$

Accepted Answer

The answer of Based on the following adjusted trial balance,...

Question 19

Given the following worksheet with the trial balance already entered, and the adjustment information, complete the worksheet.  Additional information:
a)Accrued Salaries, $10.
b)Supplies used, $2.
c)Balance of unearned service revenue at end of period, $12.
d)Amortization expense, $3.
e)Accrued service revenue, $5.

Accepted Answer

The answer of Given the following worksheet with the trial...

Question 20

Net income for O'Neal Company is $25,000 for the current year. The owner withdrew $3,000 per month for personal living expenses. The owner's capital account will show a net:

Accepted Answer

A) decrease of $25,000. 
B) increase of $22,000. 
C) decrease of $11,000. 
D) increase of $11,000.

Exam 4: Completing the Accounting Cycle

A credit balance in the income summary account after closing revenues and expenses indicates a net income for the current period.

After all the account balances have been extended to the balance sheet columns of the worksheet, the totals of the debit and credit columns are $35,350 and $38,750, respectively. It can be concluded the company has a:

Jonathan Swift Movers had the following current ratios 2.2:1; 2.5:1; 2.8:1 for 2017, 2018, 2019 respectively. Which of the following statements most correctly depicts the change in liquidity?

After all the account balances have been extended to all columns of the worksheet, the totals of the debit and credit columns for the income statement columns are $35,350 and $38,750, respectively. It can be concluded the company has a:

If the amount of net income for the current period exceeds the amount of the owner's withdrawals, there will be a(n) :

Owner withdrawals for the current period are closed to:

The prepaid rent account has a balance that is $400 less in the worksheet's balance sheet debit column than in the worksheet's trial balance debit column. This would be the result of a:

A review of the accounting records discovered that unearned rent revenue received from a client in the amount of $1,500 had been incorrectly recorded as $2,200. Which of the following journal entries will correct the ledger accounts?

The entry to close the withdrawals account would include a credit to the income summary account.

Net income appears on the worksheet:

The accounts that appear on a post-closing trial balance are:

The income statement debit column exceeds the income statement credit column on a worksheet. This indicates:

When a journal entry contains an error and the error is detected before posting, the entry can be corrected.

The net income or loss for the period is placed on the worksheet to balance which sets of columns?

On a worksheet, the sum of the income statement debit column exceeds the sum of the income statement credit column. This indicates the company generated a net loss during the current period.

Net income for O'Neal Company is $25,000 for the current year. The owner withdrew $3,000 per month for personal living expenses. The owner's capital account will show a net: