Question 1

The account to which revenue and expenses are closed is called

Accepted Answer

A)  Cash. 
B)  Drawing. 
C)  Income Summary. 
D)  Net Income.

Question 2

From the partial work sheet,prepare an income statement,a statement of owner's equity,and a classified balance sheet.The owner made no additional investments in the business during the month.

Accepted Answer

The answer of From the partial work sheet,prepare an income...

Question 3

A statement of owner's equity is a statement summarizing all of the changes in owner's equity during a specified period of time.

Accepted Answer

A) True 
 B)False

Question 4

Number in their proper order the following steps in the accounting cycle.
 ____a. Frepare a trial balance.
____b. Post to the general ledger accounts.
____c. Journalize and post the closing entries.
____d. Complete an end-of-period work sheet.
____e. Prepare a post-closing trial bal ance.
____f. Journalize and post the adjusting entries.
____g. Analyze source documents.
____h. Record the adjusting entries on a work sheet.
____i. Joumalize the transactions.
____j. Prepare the financial statements.

Accepted Answer

The answer of Number in their proper order the following...

Question 5

The steps involved in handling all of the transactions and events completed during an accounting period,beginning with placing data in a book of original entry and ending with a post-closing trial balance,are referred to collectively as

Accepted Answer

A)  input. 
B)  processing. 
C)  output. 
D)  the accounting cycle.

Question 6

Property,plant,and equipment are assets that are expected to serve the business for many years.

Accepted Answer

A) True 
 B)False

Question 7

A(n)____________________ balance sheet shows the assets on the left and the liabilities and the owner's equity sections on the right.

Accepted Answer

The answer of A(n)____________________ balance sheet shows the assets on...

Question 8

The accuracy of the statement of cash flows can be proved by comparing the cash provided by operating activities with the change in the cash balance.

Accepted Answer

A) True 
 B)False

Question 9

The effect of drawing transactions on the capital account is formalized at any time during the accounting period.

Accepted Answer

A) True 
 B)False

Question 10

The period of time required to purchase supplies and services and convert them back into cash is the ____________________.

Accepted Answer

The answer of The period of time required to purchase...

Question 11

Match between columns
                        Premises: Owner, Drawing
Insurance Expense
Income Summary
Accounts Payable
Cash
Owner, Capital
Accumulated Depreciation—Equipment
Accounts Receivable
Fees Earned
Prepaid Insurance

Accepted Answer

The Answer of permanent (P) and temporary (T) is...

Question 12

Expenses on the income statement could be listed in alphabetical order by dollar amount.

Accepted Answer

A) True 
 B)False

Question 13

Match the terms with the definitions.
-A balance sheet with separate categories for current assets; property,plant,and equipment; current liabilities; and long-term liabilities.

Accepted Answer

A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts

Question 14

The total revenue of the month of June amounted to $7,500; total expenses amounted to $3,500; and withdrawals amounted to $600.The net income for the month amounted to

Accepted Answer

A)  $7,500. 
B)  $3,400. 
C)  $4,000. 
D)  $3,500.

Question 15

The income statement includes all changes in owner's equity except those resulting from investments or withdrawals of assets by the owner.

Accepted Answer

A) True 
 B)False

Question 16

What is the purpose of the post-closing trial balance?

Accepted Answer

A)  to prove no errors were made while recording entries in the journal 
B)  to prove the equality of the debit and credit balances in the general ledger accounts 
C)  to prove the closing entries were recorded correctly in the journal 
D)  to prove the balances in the general ledger accounts are correct

Question 17

A form of balance sheet that shows the liabilities and owner's equity sections below the assets section is called an account form of balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

From the following adjusted trial balance,journalize the necessary closing entries.Prepare a post-closing trial balance.
 $\begin{array}{c}
\text { Adjusted Trial Balance }\
\begin{array}{lr}
 \underline{\text { Account Title}}& \underline{\text { Debit}}& \underline{\text { Credit}}\
\text { Cash } & 1,500 \
\text { Accounts Receivable } & 1,460 \
\text { Prepaid Insurance } & 800 \
\text { Supplies } & 900 \
\text { Equipment } & 5,500\
\text { Accumulated Depreciation-Equipment } && 550 \
\text { Accounts Payable } && 1,300 \
\text { Wages Payable } && 760 \
\text { Owner, Capital } && 6,550\
\text { Owner, Drawing } & 1,400 & \
\text { Service Revenue } & & 8,900 \
\text { Wages Expense } & 3,000 &\
\text { Rent Expense } & 1,500 \
\text { Supplies Expense } & 900 \
\text { Utilities Expense } & 600 \
\text { Depreci ation Expense-Equipment } &  \underline{500}&\underline{\quad\quad} \
&18,060&18,060
\end{array}\end{array}$

Accepted Answer

The answer of From the following adjusted trial balance,journalize the...

Question 19

Long-term liabilities or ____________________ are obligations that are not expected to be paid within a year and do not require the use of current assets.

Accepted Answer

The answer of Long-term liabilities or ____________________ are obligations that...

Question 20

____________________ are due within either one year or the normal operating cycle of the business,whichever is longer,and are to be paid out of current assets.

Accepted Answer

The answer of ____________________ are due within either one year...

Exam 6: Financial Statements and the Closing Process

The account to which revenue and expenses are closed is called

From the partial work sheet,prepare an income statement,a statement of owner's equity,and a classified balance sheet.The owner made no additional investments in the business during the month.

A statement of owner's equity is a statement summarizing all of the changes in owner's equity during a specified period of time.

The steps involved in handling all of the transactions and events completed during an accounting period,beginning with placing data in a book of original entry and ending with a post-closing trial balance,are referred to collectively as

Property,plant,and equipment are assets that are expected to serve the business for many years.

A(n)____________________ balance sheet shows the assets on the left and the liabilities and the owner's equity sections on the right.

The accuracy of the statement of cash flows can be proved by comparing the cash provided by operating activities with the change in the cash balance.

The effect of drawing transactions on the capital account is formalized at any time during the accounting period.

The period of time required to purchase supplies and services and convert them back into cash is the ____________________.

Indicate which of the following general ledger accounts are temporary (T)or permanent (P).

Expenses on the income statement could be listed in alphabetical order by dollar amount.

Match the terms with the definitions. -A balance sheet with separate categories for current assets; property,plant,and equipment; current liabilities; and long-term liabilities.

The total revenue of the month of June amounted to $7,500; total expenses amounted to $3,500; and withdrawals amounted to $600.The net income for the month amounted to

The income statement includes all changes in owner's equity except those resulting from investments or withdrawals of assets by the owner.

What is the purpose of the post-closing trial balance?

A form of balance sheet that shows the liabilities and owner's equity sections below the assets section is called an account form of balance sheet.

Long-term liabilities or ____________________ are obligations that are not expected to be paid within a year and do not require the use of current assets.

____________________ are due within either one year or the normal operating cycle of the business,whichever is longer,and are to be paid out of current assets.