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Exam 4: Completing the Accounting Cycle

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Question 41

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The recurring steps performed each reporting period, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

A) Accounting period.
B) Operating cycle.
C) Accounting cycle.
D) Closing cycle.
E) Natural business year.

F) A) and E)
G) A) and C)

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Question 42

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The usual order for the asset section of a classified balance sheet is:

A) Current assets, prepaid expenses, long-term investments, intangible assets.
B) Long-term investments, current assets, property, plant and equipment, intangible assets.
C) Current assets, long-term investments, property, plant and equipment, intangible assets.
D) Intangible assets, current assets, long-term investments, property, plant and equipment.
E) Property, plant and equipment, intangible assets, long-term investments, current assets.

F) A) and B)
G) A) and C)

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Question 43

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Statements that show the effects of proposed transactions as if the transactions had already occurred are called:

The following information has been gathered for Stylish Co. to assist in preparing its year-end adjusting entries at December 31: (a) The company has earned $2,500 of rental revenue that has not yet been received or recorded. (b) Stylish has recorded $3,200 of unearned service fees. At year-end, $1,500 of this amount has been earned. (c) Depreciation on equipment for the year is $7,800. (d) Employees have earned but have not yet been paid $2,750 in salaries. Identify which of the above accounting adjustment would be reversed assuming Stylish Co. uses reversing entries.

Which of the following statements is ?

The Adjusted Trial Balance of Bade Cleaning Service is entered on the partial work sheet below. Complete the work sheet by extending the account balances into the appropriate financial statement columns and by entering the amount of net income for the reporting period:

Match the following terms with the appropriate definition.

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry?

A post-closing trial balance reports:

Bentley records adjusting entries at its December 31 year end. At December 31, employees had earned $12,000 of unpaid and unrecorded salaries. The next payday is January 3, at which time $30,000 will be paid. Prepare the journal on January 3 to record payment assuming the correct adjusting and reversing entries were made on December 31 and January 1.

When closing entries are made:

A columnar working paper used to prepare a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements, and which is an optional tool in the accounting process is a(n) :

The unadjusted trial balance ofE. Pace, Consultant is entered on the partial work sheet below. Complete the work sheet using the following information: (a) Salaries earned by employees that are unpaid and unrecorded, $500. (b) An inventory of supplies showed $800 of unused supplies still on hand. (c) Depreciation on equipment, $1,300.

A ____________________ helps in preparing financial statements, is useful in preparing interim statements, and is helpful in showing the effects of proposed transactions.

Balance sheet accounts are called ____________________ accounts because they carry their balances to the next accounting period, and are not closed as long as the company continues to own the asset, owe the liability and have equity.

Closing entries result in net income or net loss being transferred to the owner's capital account.

Journalizing and posting closing entries is a required step in the accounting cycle. Explain why it is necessary to close the books at the end of an accounting period.

Assets, liabilities, and equity accounts are not closed; these accounts are called:

The current ratio is computed by dividing current liabilities by current assets.

Dina Kader withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is: