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Exam 4: Completing the Accounting Cycle

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Question 61

True/False

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There is really benefit in preparing financial statements in any particular order.

A) True
B) False

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Question 62

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During the closing process, some balance sheet accounts are closed and end the period with a zero balance.

A) True
B) False

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Question 63

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Round tripping is a fraudulent scheme where business A artificially inflates revenue by lending money to customer B who uses that money to buy products from A.

Use the information in the adjusted trial balance for Stockton Company to answer the questions that follow. Determine the total liabilities for the period.

The work sheet at the end of July has $5,350 in the Balance Sheet credit column for Accumulated Depreciation. The work sheet at the end of August has $6,700 in the Balance Sheet credit column for Accumulated Depreciation. What was the amount of the depreciation expense adjustment for the month of August?

Explain how net income or loss is determined by using the work sheet.

The dividends account is a temporary account.

The balances in the ledger of Good Landscape Services as of January 31, 2012 before adjustments are as follows: Adjustment data are as follows: supplies on hand, January 31, $1,800; insurance expired for January, $1,100; depreciation on equipment for January, $2,500; salaries accrued, January 31, $1,650.

Which account would not appear in the Balance Sheet columns of the work sheet?

After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns show debits of $36,678 and the credits of $41,101. This indicates that

Closing entries are entered directly on to the work sheet.

The fiscal year selected by companies

The following are steps in the accounting cycle. Of the following, which would be prepared last?

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?

The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial Balance column totals and the Adjustments column totals.

The following are all the steps in the accounting cycle. List them in the order in which they should be done. - Closing entries are journalized and posted to the ledger. - An unadjusted trial balance is prepared. - An optional end-of-period spreadsheet (work sheet) is prepared. - A post-closing trial balance is prepared. - Adjusting entries are journalized and posted to the ledger. - Transactions are analyzed and recorded in the journal. - Adjustment data are assembled and analyzed. - Financial statements are prepared. - An adjusted trial balance is prepared. - Transactions are posted to the ledger.

Since the adjustments are entered on the work sheet, it is necessary to record them in the journal or post them to the ledger.

After net income is entered on the work sheet, the Balance Sheet Debit and Credit columns must

Identify which of the following accounts should be closed to Income Summary at the end of the fiscal year. Record next to each account: a (Y) for YES, it should be closed to Income Summary; OR an (N) for NO, it would not be closed to Income Summary. 1. Utilities Payable 2. Utilities Expense 3. Supplies 4. Supplies Expense 5. Fees Earned 6. Unearned Fees 7. Accounts Receivable 8. Dividends 9. Retained Earnings 10. Accumulated Depreciation - Equipment 11. Depreciation Expense - Equipment 12. Equipment 13. Prepaid Insurance 14. Insurance Expense

The post-closing trial balance differs from the adjusted trial balance in that it