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Exam 4: Completing the Accounting Cycle

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Question 101

True/False

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Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets.

A) True
B) False

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Question 102

Multiple Choice

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

A) debit Income Summary; credit Prepaid Insurance
B) debit Prepaid Insurance; credit Income Summary
C) debit Insurance Expense; credit Income Summary
D) debit Income Summary; credit Insurance Expense

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

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Question 103

Multiple Choice

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Which of the following accounts will be closed to the Capital account at the end of the fiscal year?

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet for April 30, 2010 for Finnegan Co.: Prepare an income statement.

Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period.

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: Net income for the period is

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

Accumulated Depreciation appears on the

The difference between a classified balance sheet and one that is classified is that the classified one has subheadings.

If the totals of the Income Statement debit and credit columns of a work sheet are $27,000 and $29,000, respectively, after all account balances have been extended, the amount of the net loss is $2,000.

Prior to adjustment at August 31, 2014, Salary Expense has a debit balance of $298,500. Salaries owed but not paid as of the same date total $7,200.

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

After the accounts have been adjusted at January 31, 2014, the end of the fiscal year, the following balances are taken from the ledger of Taylor Pool Service Company: Journalize the four entries required to close the accounts

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet columns.