Question 1

Use the work sheet for Finley Company to answer the questions that follow.   The entry to close Income Summary would be

Accepted Answer

A)   debit Retained Earnings, $50,000; credit Income Summary, $50,000
B)   debit Income Summary, $155,000; credit Retained Earnings, $155,000
C)   debit Income Summary, $50,000; credit Retained Earnings, $50,000
D)   debit Retained Earnings, $9,000; credit Income Summary, $9,000E) A) and B)
F) All of the above

Question 2

The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial Balance column totals and the Adjustments column totals.

Accepted Answer

A) True 
 B)False

Question 3

The usual presentation of the retained earnings statement is (1) beginning retained earnings, (2) net income or loss, (3) dividends (4) ending retained earnings.

Accepted Answer

A) True 
 B)False

Question 4

A net loss appears on the work sheet in the

Accepted Answer

A)   debit column of the Balance Sheet columns
B)   credit column of the Balance Sheet columns
C)   debit column of the Income Statement columns
D)   credit column of the Adjustments columnsE) All of the above
F) B) and C)

Question 5

The income summary account is closed to the retained earnings account.

Accepted Answer

A) True 
 B)False

Question 6

Use the information in the adjusted trial balance for Stockton Company to answer the questions that follow. 
 Determine the net income (loss)  for the period.

Accepted Answer

A)   Net Income $9,250
B)   Net Loss $790
C)   Net Loss $5,670
D)   Net Income $3,580E) C) and D)
F) B) and C)

Question 7

Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Amir's first month of operations on March 31st?

Accepted Answer

A)   $7,200
B)   $720
C)   $600
D)   $6,600E) B) and C)
F) A) and D)

Question 8

Any twelve-month accounting period adopted by a company is known as its fiscal year.

Accepted Answer

A) True 
 B)False

Question 9

The accounting cycle begins with preparing an unadjusted trial balance.

Accepted Answer

A) True 
 B)False

Question 10

There is really  no benefit in preparing financial statements in any particular order.

Accepted Answer

A) True 
 B)False

Question 11

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet columns.

Accepted Answer

The answer of The balances for the accounts listed below...

Question 12

The post-closing trial balance will generally have fewer accounts than the trial balance.

Accepted Answer

A) True 
 B)False

Question 13

Use the work sheet for Finley Company to answer the questions that follow. 
The entry to close expenses would be

Accepted Answer

A)   Wages Expense 63,000 Rent Expense 27,000Depreciation Expense 15,000Income Summary 105,000
B)   Expenses 105,000 Income Summary 105,000
C)   Wages Expense 63,000 Rent Expense 27,000Depreciation Expense 15,000Dividends 105,000
D)   Income Summary 105,000 Wages Expense 63,000Rent Expense 27,000Depreciation Expense 15,000E) B) and C)
F) A) and C)

Question 14

Which of the accounts below would appear in the Balance Sheet columns of the work sheet?

Accepted Answer

A)   Service Revenue
B)   Prepaid Rent
C)   Supplies Expense
D)   None are correctE) None of the above
F) A) and D)

Question 15

The following revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co. for the year ended December 31, 2011:
  Prepare an income statement.

Accepted Answer

The answer of The following revenue and expense account balances...

Question 16

Use the work sheet for Finley Company to answer the questions that follow. 
 The journal entry to close revenues would be

Accepted Answer

A)   debit Income Summary, $155,000; credit Fees Earned, $155,000
B)   debit Retained Earnings, $155,000; credit Fees Earned, $155,000
C)   debit Fees Earned, $155,000; credit Income Summary, $155,000
D)   credit Fees Earned, $155,000; credit Retained Earnings, $155,000E) All of the above
F) A) and B)

Question 17

Which item would appear in the Income Statement columns of the work sheet?

Accepted Answer

A)   Equipment
B)   Unearned Fees
C)   Prepaid Expense
D)   Net LossE) All of the above
F) B) and D)

Question 18

Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period.

Accepted Answer

A) True 
 B)False

Question 19

Prepaid insurance is reported on the balance sheet as a

Accepted Answer

A)   current asset
B)   fixed asset
C)   current liability
D)   long-term liabilityE) A) and B)
F) All of the above

Question 20

Beachside Realty rents condominiums and furnishings. It's adjusted trial balance at December 31, 2011, is as follows:
  Prepare the entry required to close the revenue accounts at the end of the period.

Accepted Answer

The answer of Beachside Realty rents condominiums and furnishings. It's...

Exam 4: Completing the Accounting Cycle

The following revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co. for the year ended December 31, 2011: Prepare an income statement.

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The usual presentation of the retained earnings statement is (1) beginning retained earnings, (2) net income or loss, (3) dividends (4) ending retained earnings.

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Which of the accounts below would appear in the Balance Sheet columns of the work sheet?

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Any twelve-month accounting period adopted by a company is known as its fiscal year.

Correct AnswerverifiedShow Answer

Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Amir's first month of operations on March 31st?

Correct AnswerverifiedShow Answer

Prepaid insurance is reported on the balance sheet as a

Correct AnswerverifiedShow Answer

There is really no benefit in preparing financial statements in any particular order.

Correct AnswerverifiedShow Answer

Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period.

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Use the work sheet for Finley Company to answer the questions that follow. The entry to close Income Summary would be

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Which item would appear in the Income Statement columns of the work sheet?

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Use the work sheet for Finley Company to answer the questions that follow. The entry to close expenses would be

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Use the work sheet for Finley Company to answer the questions that follow. The journal entry to close revenues would be

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The accounting cycle begins with preparing an unadjusted trial balance.

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The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet columns.

Correct AnswerverifiedShow Answer

A net loss appears on the work sheet in the

Correct AnswerverifiedShow Answer

The post-closing trial balance will generally have fewer accounts than the trial balance.

Correct AnswerverifiedShow Answer

Use the information in the adjusted trial balance for Stockton Company to answer the questions that follow. Determine the net income (loss) for the period.

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The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial Balance column totals and the Adjustments column totals.

Correct AnswerverifiedShow Answer

Beachside Realty rents condominiums and furnishings. It's adjusted trial balance at December 31, 2011, is as follows: Prepare the entry required to close the revenue accounts at the end of the period.

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The income summary account is closed to the retained earnings account.

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