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Exam 4: Completing the Accounting Cycle

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Question 71

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Assets,liabilities,and stockholders' equity accounts are real accounts and do not get closed at the end of the period.

A) True
B) False

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Question 72

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A work sheet heading is dated for a period of time.

A) True
B) False

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Question 73

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Prior to adjustment at August 31,Salary Expense has a debit balance of $298,500.Salaries owed but not paid as of the same date total $4,200. Present the entries to record the following: 1 Accrued salaries as of August 31. 2 Closing of Salary Expense as of August 31.

After all of the account balances have been extended to the Income Statement columns of the work sheet,the totals of the debit and credit columns are $77,500 and $83,900,respectively.What is the amount of the net income or net loss for the period?

A fiscal year that ends when business activities have reached their lowest point is called the natural business year.

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

Which of these titles would appear in the Income Statement columns of the end-of-period spreadsheet?

$\begin{array}{c}\text { Finley Company }\\\text { End-of-Period Spreadsheet }\\\text { For the Year Ended December } 31\\\begin{array}{|l|r|r|}\hline {\text { Account Title }} & {\text { Debit }} & {\text { Credit }} \\\hline \text { Cash } & 48,000 & \\\hline \text { Accounts Receivable } & 18,000 & \\\hline \text { Supplies } & 6,000 & \\\hline \text { Equipment } & 57,000 & \\\hline \text { Accumulated Depr. } & & 18,000 \\\hline \text { Accounts Payable } & & 25,000 \\\hline \text { Wages Payable } & & 6,000 \\\hline \text { Common Stock } & & 30,000 \\\hline \text { Retained Earnings } & & 3,000 \\\hline \text { Dividends } & 3,000 & \\\hline \text { Fees Earned } & & 155,000 \\\hline \text { Wages Expense } & 63,000 & \\\hline \text { Rent Expense } & 27,000 & \\ \hline \text { Depreciation Expense } & 15,000 & \\\hline \text { Totals } & \underline{237,000} & \underline{237,000} \\\hline \text { Net Income Loss } & & \\\hline\\\hline\end{array}\begin{array}{r|r|r|r|}\hline \text { Debit } & \text { Credit } & \text { Debit } & \text { Credit } \\\hline & & 48,000 & \\\hline & & 18,000 & \\\hline & & 6,000 & \\\hline & & 57,000 & \\\hline & & & 18,000 \\\hline & & & 25,000 \\\hline & & & 6,000 \\\hline & & & 30,000 \\\hline & & & 3,000 \\\hline & & 3,000 & \\\hline & 155,000 & & \\\hline 3,000 & & & \\\hline 27,000 & & & \\\hline 15,000 & & & \\\hline 105,000 & 155,000 & 132,000 & 82,000 \\\hline 50,000 & & & 50,000 \\\hline 155,000 & \underline{155,000} & \underline{132,000} & \underline{132,000} \\\hline\end{array}\end{array}$ -The entry to close Income Summary would be

The post-closing trial balance differs from the adjusted trial balance in that it does not

The retained earnings statement begins with the beginning balance followed by

The following is the adjusted trial balance for Miller Company. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Miller Company }$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Adjusted Trial Balance }$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { December } 31$ $\begin{array}{l}\begin{array}{|l}\hline \text { Cash} \\\hline \text {Accounts Receivable} \\\hline \text {Prepaid Expenses} \\\hline \text {Equipment} \\\hline \text {Accumulated Depreciation} \\\hline \text {Accounts Payable} \\\hline \text {Notes Payable} \\\hline \text {Common Stock} \\\hline \text {Retained Earnings} \\\hline \text {Dividends} \\\hline \text {Fees Earned} \\\hline \text {Wages Expense} \\\hline \text {Rent Expense} \\\hline \text {Utilities Expense} \\\hline \text {Depreciation Expense} \\\hline \text {Miscellaneous Expense} \\\hline \text {Totals} \\\hline\end{array}\begin{array}{|l|l|}\hline 8,130 \\\hline 3,300 \\\hline 2,750 \\\hline 10,400 \\\hline &2,200 \\\hline &2,700 \\\hline &1,000 \\\hline & 9,200 \\\hline &2,000 \\\hline 4,870\\\hline & 36,600\\\hline 12,450 \\\hline 4,900 \\\hline 3,475 \\\hline 2,150 \\\hline 1,275 \\\hline \underline {53,700}&\underline {53,700} \\\hline\end{array}\end{array}$ Prepare closing entries and the post-closing trial balance.

Which of the following is not true about closing entries?

Which one of the fixed asset accounts listed below will not have a related contra asset account?

$\begin{array}{c}\text { Finley Company }\\\text { End-of-Period Spreadsheet }\\\text { For the Year Ended December } 31\\\begin{array}{|l|r|r|}\hline {\text { Account Title }} & {\text { Debit }} & {\text { Credit }} \\\hline \text { Cash } & 48,000 & \\\hline \text { Accounts Receivable } & 18,000 & \\\hline \text { Supplies } & 6,000 & \\\hline \text { Equipment } & 57,000 & \\\hline \text { Accumulated Depr. } & & 18,000 \\\hline \text { Accounts Payable } & & 25,000 \\\hline \text { Wages Payable } & & 6,000 \\\hline \text { Common Stock } & & 30,000 \\\hline \text { Retained Earnings } & & 3,000 \\\hline \text { Dividends } & 3,000 & \\\hline \text { Fees Earned } & & 155,000 \\\hline \text { Wages Expense } & 63,000 & \\\hline \text { Rent Expense } & 27,000 & \\ \hline \text { Depreciation Expense } & 15,000 & \\\hline \text { Totals } & \underline{237,000} & \underline{237,000} \\\hline \text { Net Income Loss } & & \\\hline\\\hline\end{array}\begin{array}{r|r|r|r|}\hline \text { Debit } & \text { Credit } & \text { Debit } & \text { Credit } \\\hline & & 48,000 & \\\hline & & 18,000 & \\\hline & & 6,000 & \\\hline & & 57,000 & \\\hline & & & 18,000 \\\hline & & & 25,000 \\\hline & & & 6,000 \\\hline & & & 30,000 \\\hline & & & 3,000 \\\hline & & 3,000 & \\\hline & 155,000 & & \\\hline 3,000 & & & \\\hline 27,000 & & & \\\hline 15,000 & & & \\\hline 105,000 & 155,000 & 132,000 & 82,000 \\\hline 50,000 & & & 50,000 \\\hline 155,000 & \underline{155,000} & \underline{132,000} & \underline{132,000} \\\hline\end{array}\end{array}$ -The entry to close expenses would be:

A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the Balance Sheet columns.

The dividends account is a temporary account.

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

Which of the accounts below would be closed by posting a debit to the account?

The income statement is prepared from

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