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Exam 4: Completing the Accounting Cycle

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Question 101

Multiple Choice

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When preparing the statement of shareholders' equity, the beginning capital balance can always be found

A) in the Income Statement columns of the work sheet
B) in the statement of cash flows
C) in the general ledger
D) in the Balance Sheet columns of the work sheet

E) B) and C)
F) None of the above

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Question 102

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The work sheet is a working paper that accountants can use to summarize adjusting entries and the account balances for the financial statements.

A) True
B) False

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Question 103

Multiple Choice

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Match each journal entry that follows as one of the types of journal entries a-c) below. -Income Summary 597 Rent Expense 200 Supplies Expense 180 Utilities Expense 110 Miscellaneous Exp. 107

Real accounts are not permanent accounts.

The closing process is sometimes referred to as closing the books.

Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.

The entry to close the appropriate insurance account at the end of the accounting period is

Assets, liabilities, and stockholders' equity accounts are real accounts and do not get closed at the end of the period.

The classified balance sheet will show which asset subsections?

Identify which of the following accounts should be closed with a debit or a credit to Income Summary at the end of the fiscal year. If it is not closed to Income Summary, mark as n/a. 1. Utilities Payable 2. Utilities Expense 3. Supplies 4. Supplies Expense 5. Fees Earned 6. Unearned Fees 7. Accounts Receivable 8. Dividends 9. Retained Earnings 10. Accumulated Depreciation-Equipment 11. Depreciation Expense-Equipment 12. Equipment 13. Prepaid Insurance 14. Insurance Expense

Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts.

Beachside Realty rents condominiums and furnishings. Below is the adjusted trial balance at December 31. $\begin{array}{|l|l|l|}\hline & \text { Debit } & \text { Credit } \\\hline \text { Cash } & 1,500 & \\\hline \text { Accounts Receivable } & 2,000 & \\\hline \text { Interest Receivable } & 100 & \\\hline \text { Prepaid Insurance } & 1,600 & \\\hline \text { Notes Receivable long-term) } & 2,800 & \\\hline \text { Equipment } & 15,000 & \\\hline \text { Accumulated Depreciation } & 3,000 \\\hline \text { A.ccounts Payable } & & 2,400 \\\hline \text { Accrued Expenses Payable } & & 3,920 \\\hline \text { Income Taxes Payable } & & 2,700 \\\hline \text { Unearned Rent Fees } & & 500 \\\hline \text { Common Stock } & & 5,000 \\\hline \text { Retained Earnings } & & 2,700 \\\hline \text { Dividends } & 2,000 & \\\hline \text { Rent Fees Earned } & & 37,000 \\\hline \text { Furniture Rental Revenue } & & 1,200 \\\hline \text { Interest Revenue } & & 100 \\\hline \text { Wages Expense } & 19,000 & \\\hline \text { Depreciation Expense } & 1,800 & \\\hline \text { Utilities Expense } & 320 & \\\hline \text { Insurance Expense } & 700 & \\\hline \text { Maintenance Expense } & 9,000 & \\\hline \text { Income Tax Expense } & 2,700 & \\\hline & 58,520 & 58,520 \\\hline\end{array}$

Shores Sports rents canoes and kayaks. Below is the adjusted trial balance at December 31. The entry required to close the revenue accounts at the end of the period includes a

Cross-referencing is useful in assuring that the debits and credits are in balance.

Debts listed as current liabilities are those that

The income statement should be prepared

On the work sheet, the common stock and dividends account balances are extended to the Balance Sheet columns.