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Exam 4: Completing the Accounting Cycle

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Question 61

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You evaluate loan requests as part of your job at Beach Front National Bank. One loan request you received is from Surfer Dude Supplies, a small proprietorship. Tracy Roberts, the owner, is requesting $75,000 and brings you a trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. REQUIRED: While you are willing to work with Tracy, 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?

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A set of financial statements provides u...

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Question 62

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The income summary account is also known as the clearing account.

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B) False

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Question 63

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Financial statements should be prepared before the closing entries are journalized and posted.

The income statement is prepared from:

Prepare closing entries from the following work sheet. Lakendra Enterprises Worksheet For the Year Ended December 31, 2010

If working papers are not considered part of the formal accounting records, then why are they used?

Marcus Enterprises was started by Damien Marcus in 2010. During 2010, Damien Marcus invested $8,000 in the business. Based on the following worksheet, prepare an income statement, statement of owner's equity, and balance sheet for Marcus Enterprises for the year ended December 31, 2010. Marcus Enterprises Worksheet For the Year Ended December 31, 2010

What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance?

On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would

Use the following worksheet to answer the following questions. Based on the preceding trial balance, the entry to close income summary would be:

The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet columns with a debit total of $630,430 and a credit total of $614,210. This is before the amount for net income or net loss has been included. In preparing the income statement from work sheet, what is the amount of net income or net loss?

Round-tripping is when

Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets.

Hakik Enterprises offers rug cleaning services to business clients. Below are the adjustments data for the year ended July 31, 2010. REQUIRED: Using this information along with the spreadsheet below, record the adjusting entries in proper general journal form. Adjustments: a) The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over its useful life. Please record one month's depreciation. b) Accrued Wages $2. c) Unused supplies on hand $8. d) Of the unearned revenue, 75% has been earned. e) Unexpired insurance remaining at the end of the month, $9.

The trial balance may be listed on the work sheet instead of being prepared separately.

After Net Income or Loss is entered on the work sheet, the debit column total must equal the credit column total for the Balance Sheet pair of columns.

The classified Balance Sheet will divide its Liabilities Section as the following subsections

The following data were taken from the Balance Sheet columns of the work sheet for April 30, 2010 for Mackenzie Company: Prepare a classified balance sheet.

Short-term liabilities are those liabilities that

Prepaid Insurance is an example of a current asset.