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Exam 4: Completing the Accounting Cycle

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Question 51

True/False

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Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or post them to the ledger.

A) True
B) False

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Question 52

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Assets, liabilities, and owner's capital are real accounts and do not get closed at the end of the period.

A) True
B) False

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Question 53

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Office Equipment is an example of a current asset account.

The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss, (3) Drawing, (4) Owner's contributions, and (5) Ending capital.

Robert Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31.​ Prepare the entry required to close the drawing account at the end of the period.

Which of the following is not an essential part of the accounting records?

The last step of the accounting cycle is to prepare a post-closing trial balance.

A net loss appears on the end-of-period spreadsheet in the

Use the following end-of-period spreadsheet to answer the questions that follow. ​ ​ ​ -Use the end-of-period spreadsheet for Finley Company. The ending balance in C. Finley, Capital is

The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period.

The difference between the totals of the Debit and Credit columns of the Adjusted Trial Balance columns on the end-of-period spreadsheet

Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month of operations on March 31?

The following are all the steps in the accounting cycle. List them in the order in which they should be done.- Closing entries are journalized and posted to the ledger.- An unadjusted trial balance is prepared.- An optional end-of-period spreadsheet (work sheet) is prepared.- A post-closing trial balance is prepared.- Adjusting entries are journalized and posted to the ledger.- Transactions are analyzed and recorded in the journal.- Adjustment data are assembled and analyzed.- Financial statements are prepared.- An adjusted trial balance is prepared.- Transactions are posted to the ledger.

Use the adjusted trial balance for Stockton Company to answer the questions that follow. ? $\begin{array}{c}\hline &&&&&&&&&&&\textbf { Stockton Company }&&&&&&&&&& \\\hline &&&&&&&&&&&\textbf { Adjusted Trial Balance }&&&& \\\hline &&&&&&&&&&&\textbf { December 31} &&&&\end{array}$ $\begin{array}{|l|c|c|c|}\hline & \begin{array}{c}\textbf { Account } \\\textbf { No. }\end{array} & \begin{array}{c}\textbf { Debit } \\\textbf { Balances }\end{array} & \begin{array}{c}\textbf { Credit } \\\textbf { Balances }\end{array} \\\hline \text { Cash } & 11 & 6,530 & \\\hline \text { Accounts Receivable } & 12 & 2,100 & \\\hline \text { Prepaid Expenses } & 13 & 700 & \\\hline \text { Equipment } & 18 & 13,700 & \\\hline \text { Accumulated Depreciation } & 19 & & 1,100 \\\hline \text { Accounts Payable } & 21 & & 1,900 \\\hline \text { Notes Payable } & 22 & & 4,300 \\\hline \text { Bob Steely, Capital } & 31 & & 12,940 \\\hline \text { Bob Steely, Drawing } & 32 & 790 & \\\hline \text { Fees Earned } & 41 & & 9,250 \\\hline \text { Wages Expense } & 51 & 2,500 & \\\hline \text { Rent Expense } & 52 & 1,960 & \\\hline \text { Utilities Expense } & 53 & 775 & \\\hline \text { Depreciation Expense } & 54 & 250 & \\\hline \text { Miscellaneous Expense } & 59 & \underline{185} &\_\_\_\_\_ \\\hline \text { Totals } & & \underline{\textbf{29,490}} & \underline{\textbf{29,490}} \\\hline\end{array}$ -Use the adjusted trial balance for Stockton Company. Determine the net income (loss) for the period.

The end-of-period spreadsheet

Which of the following accounts would appear in the Balance Sheet columns of the end-of-period spreadsheet?

Robert Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31.​ Prepare the entry required to close the revenue and expense accounts at the end of the period.

Accrued expenses are ordinarily listed on the balance sheet as current assets.

Once the adjusting entries are posted, the adjusted trial balance is prepared to

Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities.