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Exam 4: Completing the Accounting Cycle

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Question 61

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The income statement will include

A) revenues less expenses (ordered largest to smallest amount) with miscellaneous expense listed last
B) revenues less expenses (ordered smallest to largest amounts) with miscellaneous expense listed last
C) revenues less expenses (ordered in alphabetical order)
D) revenues less expenses (order is not important)

E) A) and D)
F) C) and D)

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Question 62

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Hakik Enterprises offers rug cleaning services to business clients.Below is the work sheet containing the trial balance for the month ended July 31,2012. Enter the adjustments in the work sheet based on the data provided below.Then enter the adjusted account balances in the Adjusted Trial Balance columns. a)The equipment is estimated to last for 5 years with no salvage value.The asset will be depreciated evenly over its useful life.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.

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Question 63

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The most important output of the accounting cycle is the financial statements.

On March 1,a company collects revenue in advance for the next twelve months and credits a liability account.The adjusting entry at year end on the work sheet would

The post-closing trial balance will generally have fewer accounts than the trial balance.

The fiscal year selected by companies

After net income or loss is entered on the work sheet,the debit column total must equal the credit column total of the Balance Sheet columns.

The dividends account is closed to the income summary account.

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

Tracy Roberts,the sole stockholder of Surfer Dude Supplies,is requesting a $75,000 loan from the bank where you work as a loan officer.He brings to you the following trial balance (or statement of accounts)as of the end of his first year of operations. What adjustments might be necessary before an accurate set of financial statements could be prepared?

In a computerized accounting system,a work sheet may be necessary because the software program automatically posts entries to the accounts and prepares financial statements.

The accounting cycle requires three trial balances be done.In what order should they be prepared?

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

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

An indication that the work sheet columns are in balance and the work sheet is completed is

Which item would appear in the Income Statement columns of the work sheet?

The accounting cycle begins with preparing an unadjusted trial balance.

On January 1,2014,the retained earnings account of Crystal Pool Service Company had a balance of $252,000.During the year,the company issued an additional $20,000 of capital stock and paid $52,400 in dividends.For the year ended December 31,2014,Crystal Pool Service Company reported a net income of $73,200.Prepare a retained earnings statement for the year ended December 31,2014.

Cash,Accounts Payable,and Capital Stock are real accounts and do get closed at the end of the period.

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