Deck 4: Completing the Accounting Cycle

Question 1

Which of the following statements is TRUE about the worksheet?

A)Profit is recorded in the Income statement credit column.
B)Profit is recorded in the Income statement debit column.
C)Profit is recorded in the adjusted trial balance debit column.
D)Profit is recorded in the balance sheet debit column.

Answer 1

B

Question 2

Which of the following is the LAST step of preparing the worksheet?

A)Copy the asset, liability, and owners' equity amounts from the adjusted trial balance to the balance sheet columns. Copy the revenue and expense amounts to the Income statement columns. Total each column.
B)Enter the adjusting entries in the adjustments columns, and total the amounts.
C)Compute each account's adjusted balance by combining the trial balance and adjustment figures. Enter each account's adjusted amount in the adjusted trial balance columns.
D)On the Income statement column, calculate profit. Enter profit or loss as the balancing amount on the Income statement and balance sheet columns. Total the Income statement and balance sheet columns.

Answer 2

D

Question 3

The adjusting entry for depreciation would include a:

A)debit to Accumulated depreciation and a credit to Depreciation expense.
B)debit to Depreciation expense and a credit to Cash.
C)debit to Accumulated depreciation and a credit to the asset.
D)debit to Depreciation expense and a credit to Accumulated depreciation.

Answer 3

D

Question 4

Which of the following statements is TRUE concerning the worksheet?

A)The worksheet is a document used to summarise data to prepare the financial statements.
B)The worksheet is a ledger.
C)The worksheet is a financial statement.
D)The worksheet is a journal.

Question 5

Please refer to the partially completed worksheet below: How much was the Profit?

A)$13 600
B)$28 400
C)$22 020
D)$42 000

Question 6

In which of the columns of the worksheet would a loss be found?

A)In the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column
B)In the balance sheet debit column and the Income statement credit column
C)In the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column
D)In the balance sheet credit column and the Income statement debit column

Question 7

The last two columns generally found on the right side of the worksheet are the Income statement columns.

Question 8

Interest expense in the worksheet's trial balance column is $3 000. Interest expense in the Income statement column is $7 000. Which of the following entries would have caused this difference?

A)A $4 000 debit to Interest expense in the worksheet's adjustments column
B)A $4 000 credit to Interest expense in the worksheet's adjustments column
C)A $7 000 credit to Interest expense in the worksheet's adjustments column
D)A $7 000 credit to Interest payable in the worksheet's adjustments column

Question 9

Profit is entered as the balancing amount in the debit side of the Income statement columns and the credit side of the balance sheet columns of the worksheet.

Question 10

Net profit (loss)is the difference between the total debits and the total credits in the Income statement columns.

Question 11

Please refer to the worksheet below. How much was the Profit?

A)$13 600
B)$22 020
C)$42 000
D)$28 400

Question 12

What is TRUE if the Income statement credit column exceeds the Income statement debit column on a worksheet?

A)The company has a profit.
B)Total liabilities exceed total assets.
C)The capital account decreased during the period.
D)The company has a loss.

Question 13

Where does Profit appear on a worksheet?

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

Question 14

The adjusted balance in the service revenue account is copied to the credit column of the Income statement worksheet.

Question 15

Prepaid rent in the worksheet's trial balance column is $4 000. Prepaid rent in the balance sheet column is $2 000. Which of the following entries would have caused this difference?

A)A $2 000 credit entry to Prepaid rent in the worksheet's adjustments column
B)A $2 000 debit entry to Cash in the worksheet's adjustments column
C)A $2 000 debit entry to Prepaid rent in the worksheet's adjustments column
D)A $2 000 credit entry to Rent expense in the worksheet's adjustments column

Question 16

The Drawings account is copied to the Income statement columns on the worksheet.

Question 17

Please refer to the partially completed worksheet below: How much was the Profit?

A)$28 400
B)$13 600
C)$22 020
D)$42 000

Question 18

Which of the following is TRUE if the Income statement debit column exceeds the Income statement credit column on a worksheet?

A)The capital account increased during the period.
B)Liabilities are greater than assets.
C)The company has a profit.
D)The company has a loss.

Question 19

Which of the following is TRUE of a completed worksheet?

A)The total debits in the Income statement column equal the dividends paid.
B)The total debits equal the total credits in each column.
C)The total debits in the Income statement column equal the total debits in the balance sheet column.
D)The total debits in the trial balance column equal the total debits in the adjusted trial balance column.

Question 20

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

A)Equipment
B)Salary payable
C)Insurance expense
D)Rent revenue

Question 21

The last step in the closing process is to credit the Drawings account and debit the Capital account.

Question 22

Permanent accounts are NOT closed at the end of the period.

Question 23

Please refer to the worksheet below. Enter the following adjusting entry into the worksheet:
At year- end, the company has only $20 of supplies left.

Question 24

Which of the following accounts would appear in the balance sheet credit column?

A)Buildings
B)Prepaid insurance
C)Service revenue
D)Unearned service revenue

Question 25

Please refer to the worksheet below. Please complete the worksheet, including the balancing amounts in the last row.

Question 26

As part of the closing process, revenues and expenses are closed to a temporary account called Profit (loss).

Question 27

Please refer to the worksheet below. Adjusting entries have been posted. Calculate the adjusted balances for all accounts and enter them in to the columns for Adjusted Trial Balance.

Question 28

Which of the following accounts would appear in the balance sheet debit column?

A)Accumulated depreciation
B)Service revenue
C)Unearned service revenue
D)Prepaid insurance

Question 29

Which of the following accounts would appear in the Income statement credit column?

A)Prepaid insurance
B)Unearned service revenue
C)Depreciation expense
D)Service revenue

Question 30

Please refer to the worksheet below. Enter the following adjusting entry into the worksheet:
At year- end, the company has earned $2 000 of service revenue from a client, but has not yet completed the job, or received a payment.

Question 31

The adjusting process zeroes out all revenues and all expenses.

Question 32

Please refer to the worksheet below. Enter the following adjusting entry into the worksheet:
At year- end, the company owes $180 of salaries to its staff that it has not paid yet.

Question 33

Which of the following accounts would appear in the Income statement debit column?

A)Unearned service revenue
B)Prepaid insurance
C)Service revenue
D)Depreciation expense

Question 34

Please refer to the worksheet below. Enter the following adjusting entry into the worksheet:
At year- end, the company records $240 of depreciation expense.

Question 35

Please refer to the following partially completed worksheet: How much was the Profit or Loss?

A)Loss of $28 400
B)Profit of $27 000
C)Profit of $1 400
D)Loss of $1 400

Question 36

Revenue accounts and expense accounts are closed to the Income summary account.

Question 37

The following is the adjusted trial balance from the worksheet for Tuttle Photography. Using the information provided in the worksheet above, prepare an Income statement for
Tuttle Photography.

Question 38

In which of the columns of the worksheet would Profit be found?

A)In the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column
B)In the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column
C)In the balance sheet credit column and the Income statement debit column
D)In the balance sheet debit column and the Income statement credit column

Question 39

Please refer to the worksheet below:
Post adjustments needed according to the information below, and complete the worksheet.
· At year- end, the company has earned $2 000 of service revenue from a client, but has not yet completed the job, or received a payment.
· At year- end, the company owes $180 of salaries to its staff that it has not paid yet.
· At year- end, the company has only $20 of supplies left.
· At year- end, the company records $240 of depreciation expense.

Question 40

Revenue accounts and expense accounts are closed to the Capital account.

Question 41

Capital is a temporary account.

Question 42

Capital is a permanent account.

Question 43

Accumulated depreciation is a permanent account.

Question 44

Salaries payable is a permanent account.

Question 45

Supplies expense is a temporary account.

Question 46

Salary expense is a temporary account.

Question 47

Accounts payable is a temporary account.

Question 48

Service revenue is a temporary account.

Question 49

Cash is a temporary account.

Question 50

Asset and liability accounts are closed to the Income summary account.

Question 51

Which of the following does NOT appear on the worksheet?

A)Profit
B)Closing entries
C)Adjusting entries
D)Adjusted balances

Question 52

Drawings is a permanent account.

Question 53

Beginning balance in Capital is $80 000. Revenues are $60 000. Expenses are $75 000. No drawings were taken. The ending balance in Capital is $95 000.

Question 54

Depreciation expense is a temporary account.

Question 55

Service revenue is a permanent account.

Question 56

Beginning balance in Capital is $10 000. Revenues are $200 000. Expenses are $120 000. Drawings are $4 000. The ending balance in Capital is $90 000.

Question 57

Supplies is a temporary account.

Question 58

Accounts receivable is a permanent account.

Question 59

Beginning balance in Capital is $80 000. Revenues are $60 000. Expenses are $75 000. No drawings were taken. The ending balance in Capital is $65 000.

Question 60

Beginning balance in Capital is $10 000. Revenues are $200 000. Expenses are $120 000. Drawings are $4 000. The ending balance in Capital is $86 000.

Question 61

Which of the following accounts will be closed by crediting the Income summary account?

A)Accumulated depreciation
B)Service revenue
C)Accounts payable
D)Depreciation expense

Question 62

The post- closing trial balance shows the profit for the period just ended.

Question 63

What is the result if the amount of profit for the year is less than the amount of the drawings?

A)The amount in the Cash account decreases.
B)The amount in the Cash account increases.
C)The Capital account decreases.
D)The Capital account increases.

Question 64

The post- closing trial balance is an optional step.

Question 65

Which of the following accounts will be closed by debiting the Income summary account?

A)Salary expense
B)Accounts receivable
C)Service revenue
D)Drawings

Question 66

Which of the following accounts will be closed by debiting the Income summary account?

A)Accounts payable
B)Depreciation expense
C)Service revenue
D)Accumulated depreciation

Question 67

Which of the following entries will be necessary to close the appropriate depreciation account at the end of the year?

A)Debit Income summary and credit Depreciation expense
B)Debit Income summary and credit Accumulated depreciation
C)Debit Accumulated depreciation and credit Income summary
D)Debit Depreciation expense and credit Income summary

Question 68

Which of the following accounts are temporary accounts that must be closed at the end of the year?

A)Assets, liabilities and capital
B)Revenues, expenses and capital
C)Assets, liabilities and drawings
D)Revenues, expenses and drawings

Question 69

Profit for the year is $25 000. Drawings of $36 000 per were taken at the end of the year. Which of the following occurs?

A)The Capital account increases by $11 000.
B)The Capital account increases by $22 000.
C)The Capital account decreases by $11 000.
D)The Capital account decreases by $22 000.

Question 70

Only permanent accounts appear on the post- closing trial balance.

Question 71

Where can closing entries be found?

A)On a company's balance sheet
B)In a company's general journal
C)On a company's worksheet
D)On a company's statement of changes in equity

Question 72

The post- closing trial balance shows the updated Capital balance.

Question 73

Which of the following accounts does NOT close at the end of the period?

A)Sales revenues
B)Accumulated depreciation
C)Drawings
D)Depreciation expense

Question 74

Which of the following accounts will still show a balance after the closing process is completed?

A)Service revenue account
B)Drawings account
C)Expense accounts
D)Accumulated depreciation account

Question 75

Revenues total $10 200. Expenses total $7 300. Drawings total $2 600. What is the balance in the Income summary account after closing profit or loss to the Capital account?

A)Balance of $0
B)Credit balance of $2 900
C)Debit balance of $2 900
D)Credit balance of $300

Question 76

Which account has a balance equal to profit immediately before it is closed?

A)The Income summary account
B)The Drawings account
C)The Capital account
D)The Profit account

Question 77

To what account is the balance in the Income summary account closed?

A)The Profit account
B)The Capital account
C)The Revenue account
D)The Drawings account

Question 78

Which is NOT an example of a temporary account?

A)Wages expense
B)Service revenue
C)Accumulated depreciation
D)Electricity and gas expense

Question 79

Which of the following entries will be necessary to close the insurance expense account at the end of the year?

A)Debit Capital and credit Insurance expense
B)Debit Insurance expense and credit Income summary
C)Debit Income summary and credit Insurance expense
D)Debit Insurance expense and credit Capital

Question 80

Revenues total $10 200. Expenses total $7 300. Drawings total $2 600. What is the balance in the Income summary account prior to closing profit or loss to the Capital account?

A)Credit balance of $2 900
B)Credit balance of $300
C)Debit balance of $2 900
D)Balance of $0