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Exam 4: Completing the Accounting Cycle

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Question 91

True/False

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The work sheet is not considered a part of the formal accounting records.

A) True
B) False

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Question 92

Multiple Choice

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The income statement is prepared from​

A) the adjusted trial balance
B) the Income Statement columns of the end-of-period spreadsheet
C) either the Adjusted Trial Balance or the Income Statement columns of the end-of-period spreadsheet
D) both the Adjusted Trial Balance and the Income Statement columns of the end-of-period spreadsheet

E) A) and B)
F) A) and C)

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Question 93

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Which of the following accounts would not appear in the Balance Sheet columns of the end-of-period spreadsheet?

You evaluate loan requests as part of your job at Eastwood National Bank. One loan request you received is from Surfer Dude Supplies, a small proprietorship. Richard Tracy, the owner, is requesting $105,000 and brings you a trial balance (or statement of accounts) for his first year of operations ended December 31.​RequiredWhile you are willing to work with Richard, how would you explain to him that a complete set of financial statements from his accountant would be more useful for evaluating the loan request?

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 owner's equity ending balance.

Net income appears on the end-of-period spreadsheet in the

The following adjusted trial balance is the result of the adjustments made at the end of the month of March for Erik Martin Company. Use these adjusted values to journalize the closing entries for Erik Martin Company.​

Prepaid insurance is reported on the balance sheet as a

Which of the following accounts will be debited in the closing entry at the end of the year?

A post-closing trial balance contains only asset and liability accounts.

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

The drawing account is debited in the closing entry.

On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount.

Which of the following is not true about closing entries?

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

The classified balance sheet will show which liability subsections?

Balance sheet accounts are not considered real accounts.

If end-of-period spreadsheets are not considered part of the formal accounting records, why are they used?

The income statement is prepared from the adjusted trial balance or the Income Statement columns on the work sheet.

Unearned fees appear on the