Question 1

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

Accepted Answer

A) True 
 B)False

Question 2

The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries.

Accepted Answer

A) True 
 B)False

Question 3

In the process of completing a work sheet, the accountant determines that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss) for the period into the work sheet would require an entry to

Accepted Answer

A)  it is not practical to enter Net Income (or Net Loss) on the work sheet.
B)  the Balance Sheet & Statement of Owner's Equity debit column and the Income Statement credit column.
C)  the Adjustments debit column and the Adjustments credit column.
D)  the Unadjusted Trial Balance debit column and the Adjustments credit column.
E)  the Income Statement debit column and the Balance Sheet & Statement of Owner's Equity credit column.F) A) and B)
G) A) and D)

Question 4

Revenue accounts are temporary accounts that should begin each accounting period with zero balances.

Accepted Answer

A) True 
 B)False

Question 5

Reversing entries:

Accepted Answer

A)  Will often result temporarily in abnormal account balances in some accounts.
B)  Must be made before preparing the post-closing trial balance.
C)  Are a required step in the accounting cycle.
D)  Are required only if the company uses accounting software to record journal entries.
E)  Are necessary when journal entries have been incorrectly recorded.F) A) and C)
G) A) and D)

Question 6

Another name for a temporary account is a(n) :

Accepted Answer

A)  Real account.
B)  Nominal account.
C)  Contra account.
D)  Balance column account.
E)  Accrued account.F) C) and D)
G) A) and B)

Question 7

Kline Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?

Accepted Answer

A)  Debit Wages Expense $7,350; credit Cash $7,350.
B)  Debit Wages Payable $7,350; credit Wages Expense $7,350.
C)  Debit Wages Expense $7,350; credit Wages Payable $7,350.
D)  Debit Wages Payable $7,350; credit Cash $7,350.
E)  Debit Cash $7,350; credit Wages Expense $7,350.F) B) and E)
G) A) and E)

Question 8

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Accepted Answer

A) True 
 B)False

Question 9

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

Accepted Answer

A)  Debit Income Summary $75,000; credit Revenues $75,000.
B)  Debit Revenues $75,000; credit Income Summary $75,000.
C)  Debit Owner's, Capital $8,000, credit Owner's, Withdrawals $8,000.
D)  Debit Income Summary $62,000, credit Expenses $62,000.
E)  Debit Income Summary $13,000; credit Owner's, Capital $13,000.F) A) and B)
G) D) and E)

Question 10

Explain the difference between temporary and permanent accounts.

Accepted Answer

Temporary, or nominal, accounts accumula...

Question 11

All of the following statements regarding a work sheet are true except:

Accepted Answer

A)  A worksheet helps in preparing interim financial statements.
B)  A worksheet is not useful in planning and organizing an audit of financial statements.
C)  A worksheet shows the effects of proposed or "what-if" transactions.
D)  A worksheet reduces possible errors when working with many accounts and adjustments.
E)  A worksheet aids in the preparation of financial statements.F) A) and E)
G) B) and C)

Question 12

All of the following regarding reversing entries are true except:

Accepted Answer

A)  Reversing entries are used to simplify a company's recordkeeping.
B)  Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the previous accounting period.
C)  Reversing entries are dated the first day of the new accounting period.
D)  Reversing entries are optional.
E)  Reversing entries should not be the exact opposite of previous period adjusting entries.F) A) and B)
G) None of the above

Question 13

Which of the following statements is incorrect?

Accepted Answer

A)  After the work sheet is completed, it can be used to help prepare the financial statements.
B)  On the work sheet, the effects of the accounting adjustments are shown on the account balances.
C)  Working papers are useful aids in the accounting process.
D)  On the work sheet, the adjusted amounts are sorted into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance.
E)  A worksheet is not a substitute for financial statements.F) A) and D)
G) None of the above

Question 14

On the work sheet, net income is entered in the Income Statement Credit column as well as the Balance Sheet or Statement of Owner's Equity Credit column.

Accepted Answer

A) True 
 B)False

Question 15

The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. After closing entries are posted, what will be the balance in the Sue Harris, Capital account? $ 125,00
  Total revenues 0 Total expenses 60,000 Sue Harris, Capital 80,000 Sue Harris, Withdrawals 15,000\begin{array}{lr}	ext { Total revenues } & 0 \	ext { Total expenses } & 60,000 \	ext { Sue Harris, Capital } & 80,000 \	ext { Sue Harris, Withdrawals } & 15,000\end{array} Total revenues  Total expenses  Sue Harris, Capital  Sue Harris, Withdrawals ​060,00080,00015,000​    Total revenues 0 Total expenses 60,000 Sue Harris, Capital 80,000 Sue Harris, Withdrawals 15,000\begin{array}{lr}	ext { Total revenues } & 0 \	ext { Total expenses } & 60,000 \	ext { Sue Harris, Capital } & 80,000 \	ext { Sue Harris, Withdrawals } & 15,000\end{array} Total revenues  Total expenses  Sue Harris, Capital  Sue Harris, Withdrawals ​060,00080,00015,000​

Accepted Answer

A)  $130,000.
B)  $65,000.
C)  $80,000.
D)  $280,000.
E)  $145,000. F) A) and E)
G) D) and E)

Question 16

Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The ending owner's capital balance after closing is:

Accepted Answer

A)  $63,300
B)  $378,300
C)  $81,300
D)  $185,000
E)  $360,300F) None of the above
G) A) and E)

Question 17

Cash and office supplies are both classified as current assets.

Accepted Answer

A) True 
 B)False

Question 18

For the year ended December 31, a company has revenues of $317,000 and expenses of $196,000. The owner withdrew $50,000 during the year. The balance in the owner's capital account before closing is $81,000. Which of the following entries would be used to close the withdrawal account?

Accepted Answer

A)  Debit Owner's Capital $81,000; credit Income Summary $81,000.
B)  Debit Income Summary $50,000; credit Owner's, Capital $50,000.
C)  Debit Income Summary $81,000, credit Owner's Withdrawals $81,000.
D)  Debit Owner's Capital $50,000; credit Owner Withdrawals $50,000.
E)  Debit Owner's Withdrawals $50,000; credit Owner's Capital $50,000.F) B) and E)
G) A) and B)

Question 19

All necessary amounts needed to prepare the income statement can be taken from the income statement columns of the work sheet, including the net income or net loss.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following accounts would be included in a post-closing trial balance?

Accepted Answer

A)  Depreciation Expense-Equipment.
B)  Salaries Expense.
C)  S. Stills, Withdrawal.
D)  Accounts Receivable.
E)  Consulting Fees Earned.F) B) and D)
G) A) and B)

Exam 4: Completing the Accounting Cycle

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Correct Answer
verified

All necessary amounts needed to prepare the income statement can be taken from the income statement columns of the work sheet, including the net income or net loss.

Correct Answer
verified

Which of the following statements is incorrect?

Correct Answer
verified

For the year ended December 31, a company has revenues of $317,000 and expenses of $196,000. The owner withdrew $50,000 during the year. The balance in the owner's capital account before closing is $81,000. Which of the following entries would be used to close the withdrawal account?

Correct Answer
verified

Correct Answer
verified

Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The ending owner's capital balance after closing is:

Correct Answer
verified

In the process of completing a work sheet, the accountant determines that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss) for the period into the work sheet would require an entry to

Correct Answer
verified

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

Correct Answer
verified

All of the following statements regarding a work sheet are true except:

Correct Answer
verified

Cash and office supplies are both classified as current assets.

Correct Answer
verified

Which of the following accounts would be included in a post-closing trial balance?

Correct Answer
verified

On the work sheet, net income is entered in the Income Statement Credit column as well as the Balance Sheet or Statement of Owner's Equity Credit column.

Correct Answer
verified

Revenue accounts are temporary accounts that should begin each accounting period with zero balances.

Correct Answer
verified

All of the following regarding reversing entries are true except:

Correct Answer
verified

Kline Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?

Correct Answer
verified

Reversing entries:

Correct Answer
verified

Another name for a temporary account is a(n) :

Correct Answer
verified

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

Correct Answer
verified

The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries.

Correct Answer
verified

Explain the difference between temporary and permanent accounts.

Correct Answer
verified
Temporary, or nominal, accounts accumula...
View Answer

Exam 4: Completing the Accounting Cycle

The accounting cycle refers to the sequence of steps used in preparing the work sheet.

Correct AnswerverifiedShow Answer

All necessary amounts needed to prepare the income statement can be taken from the income statement columns of the work sheet, including the net income or net loss.

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

For the year ended December 31, a company has revenues of $317,000 and expenses of $196,000. The owner withdrew $50,000 during the year. The balance in the owner's capital account before closing is $81,000. Which of the following entries would be used to close the withdrawal account?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The ending owner's capital balance after closing is:

Correct AnswerverifiedShow Answer

In the process of completing a work sheet, the accountant determines that the Income Statement debit column totals $83,000, while the Income Statement credit column totals $65,000. To enter net income (or net loss) for the period into the work sheet would require an entry to

Correct AnswerverifiedShow Answer

Reversing entries are recorded in response to external transactions that were created in error during the prior accounting period.

Correct AnswerverifiedShow Answer

All of the following statements regarding a work sheet are true except:

Correct AnswerverifiedShow Answer

Cash and office supplies are both classified as current assets.

Correct AnswerverifiedShow Answer

Which of the following accounts would be included in a post-closing trial balance?

Correct AnswerverifiedShow Answer

On the work sheet, net income is entered in the Income Statement Credit column as well as the Balance Sheet or Statement of Owner's Equity Credit column.

Correct AnswerverifiedShow Answer

Revenue accounts are temporary accounts that should begin each accounting period with zero balances.

Correct AnswerverifiedShow Answer

All of the following regarding reversing entries are true except:

Correct AnswerverifiedShow Answer

Kline Company accrued wages of $7,350 that were earned by employees unpaid at the year-end. Assuming Kline uses reversing entries, which of the following entries correctly reverses the accrued wages at the beginning of the following year?

Correct AnswerverifiedShow Answer

Reversing entries:

Correct AnswerverifiedShow Answer

Another name for a temporary account is a(n) :

Correct AnswerverifiedShow Answer

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

Correct AnswerverifiedShow Answer

The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries.

Correct AnswerverifiedShow Answer

Explain the difference between temporary and permanent accounts.

Correct AnswerverifiedTemporary, or nominal, accounts accumula...View AnswerShow Answer

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Temporary, or nominal, accounts accumula...
View Answer