Font size
Worksheetschapter 4: completing the accounting cycle
Total questions: 47
Worksheet time: 24mins
Companies do not journalize the adjustments until after they complete the worksheet and prepare the financial
statements.
True
False
Step one in using the worksheet is
Prepare a trial balance on the worksheet.
Extend adjusted balances to appropriate statement columns.
Enter adjustment data.
Enter adjusted balances.
Total the statement columns, compute net income(or net loss), and complete worksheet
Step two in using the worksheet is
Prepare a trial balance on the worksheet.
Extend adjusted balances to appropriate statement columns.
Enter adjustment data.
Enter adjusted balances.
Total the statement columns, compute net income(or net loss), and complete worksheet
Step three in using the worksheet is
Prepare a trial balance on the worksheet.
Extend adjusted balances to appropriate statement columns.
Enter adjustment data.
Enter adjusted balances.
Total the statement columns, compute net income(or net loss), and complete worksheet
Step four in using the worksheet is
Prepare a trial balance on the worksheet.
Extend adjusted balances to appropriate statement columns.
Enter adjustment data.
Enter adjusted balances.
Total the statement columns, compute net income(or net loss), and complete worksheet
Step five in using the worksheet is
Prepare a trial balance on the worksheet.
Extend adjusted balances to appropriate statement columns.
Enter adjustment data.
Enter adjusted balances.
Total the statement columns, compute net income(or net loss), and complete worksheet
For each account, the amount in the adjusted trial balance columns is the balance that will appear
in the ledger after journalizing and posting the general entries.
True
False
Which of the following statements is incorrect concerning the worksheet?
The worksheet is essentially a working tool of the
accountant.
The worksheet is distributed to management and
other interested parties.
The worksheet cannot be used as a basis for posting to ledger accounts.
Financial statements can be prepared directly
from the worksheet before journalizing and posting the adjusting entries.
The two steps for opening an account are writing the account title and recording the balance.
The steps for posting are to write the date, the journal page number, the amount, and thebalance.
If the payment of cash for rent was journalized and posted in error as a debit to Miscellaneous Expense instead of Rent Expense, the correcting entry will include a credit to Cash.
A group of accounts is called a ledger.
In a worksheet, net income is entered in the following
columns:
income statement (Dr) and balance sheet (Dr).
income statement (Cr) and balance sheet (Dr).
income statement (Dr) and balance sheet (Cr).
income statement (Cr) and balance sheet (Cr).
In the unadjusted trial balance of its worksheet for the
year ended December 31, 2017, Knox Company
reported Equipment of $120,000. The year-end adjusting entries require an adjustment of $15,000 for depreciation expense for the equipment. After the adjusted
trial balance is completed, what amount should be
shown in the financial statement columns?
A debit of $105,000 for Equipment in the balance
sheet column.
A credit of $15,000 for Depreciation Expense—
Equipment in the income statement column.
A debit of $120,000 for Equipment in the balance
sheet column.
A debit of $15,000 for Accumulated Depreciation—
Equipment in the balance sheet column
An account that will have a zero balance after closing
entries have been journalized and posted is:
Service Revenue.
Supplies.
Prepaid Insurance.
Accumulated Depreciation—Equipment.
When a net loss has occurred, Income Summary is:
debited and Owner’s Capital is credited.
credited and Owner’s Capital is debited.
debited and Owner’s Drawings is credited.
credited and Owner’s Drawings is debited
The closing process involves separate entries to close
(1) expenses, (2) drawings, (3) revenues, and (4) income
summary. The correct sequencing of the entries is:
(4), (3), (2), (1)
(1), (2), (3), (4)
(3), (1), (4), (2)
(3), (2), (1), (4).
Which types of accounts will appear in the post-closing
trial balance?
Permanent (real) accounts.
Temporary (nominal) accounts.
Accounts shown in the income statement columns
of a worksheet.
None of these answer choices is correct.
All of the following are required steps in the accounting cycle except:
journalizing and posting closing entries.
preparing financial statements.
journalizing the transactions.
preparing a worksheet.
The proper order of the following steps in the accounting cycle is:
prepare unadjusted trial balance, journalize
transactions, post to ledger accounts, journalize
and post adjusting entries.
journalize transactions, prepare unadjusted trial
balance, post to ledger accounts, journalize and
post adjusting entries.
journalize transactions, post to ledger accounts,
prepare unadjusted trial balance, journalize and
post adjusting entries.
prepare unadjusted trial balance, journalize and
post adjusting entries, journalize transactions,
post to ledger accounts.
When Ramirez Company purchased supplies worth
$500, it incorrectly recorded a credit to Supplies for
$5,000 and a debit to Cash for $5,000. Before correcting this error:
Cash is overstated and Supplies is overstated.
Cash is understated and Supplies is understated.
Cash is understated and Supplies is overstated.
Cash is overstated and Supplies is understated.
Cash of $100 received at the time the service was performed was journalized and posted as a debit to Cash
$100 and a credit to Accounts Receivable $100. Assuming
the incorrect entry is not reversed, the correcting entry is:
debit Service Revenue $100 and credit Accounts
Receivable $100.
debit Accounts Receivable $100 and credit Service
Revenue $100.
debit Cash $100 and credit Service Revenue $100
debit Accounts Receivable $100 and credit Cash
$100.
The correct order of presentation in a classified balance sheet for the following current assets is:
accounts receivable, cash, prepaid insurance,
inventory.
cash, inventory, accounts receivable, prepaid
insurance.
cash, accounts receivable, inventory, prepaid
insurance.
inventory, cash, accounts receivable, prepaid
insurance.
A company has purchased a tract of land. It expects to
build a production plant on the land in approximately
5 years. During the 5 years before construction, the
land will be idle. The land should be reported as:
property, plant, and equipment.
land expense.
a long-term investment.
an intangible asset.
In a classified balance sheet, assets are usually classified using the following categories:
current assets; long-term assets; property, plant,
and equipment; and intangible assets.
current assets; long-term investments; property,
plant, and equipment; and tangible assets.
current assets; long-term investments; tangible
assets; and intangible assets.
current assets; long-term investments; property,
plant, and equipment; and intangible assets.
Current assets are listed:
by expected conversion to cash.
by importance.
by longevity.
alphabetically
On December 31, Kevin Hartman Company correctly
made an adjusting entry to recognize $2,000 of
accrued salaries payable. On January 8 of the next
year, total salaries of $3,400 were paid. Assuming the
correct reversing entry was made on January 1, the
entry on January 8 will result in a credit to Cash
$3,400 and the following debit(s):
Salaries and Wages Payable $1,400 and Salaries
and Wages Expense $2,000.
Salaries and Wages Payable $2,000 and Salaries
and Wages Expense $1,400.
Salaries and Wages Expense $3,400.
Salaries and Wages Payable $3,400.
Olsteen Company earned revenues of $61,000 and incurred expenses of $71,000. No withdrawals were taken. The owner did not make any new capital contributions during the year. The company is a sole proprietorship. Which of the following statements is correct?
The entry to close Income Summary requires a debit to the Income Summary account.
The entry to close Income Summary is the same regardless of a net income or a net loss.
The entries to close revenues and expenses will differ if there is a net loss.
Olsteen, Capital will be debited for $10,000 and Income Summary will be credited for $10,000.
Which of the following accounts will be closed by crediting the Income Summary account?
Accumulated Depreciation
Accounts Payable
Service Revenue
Depreciation Expense
Which of the following are temporary accounts that are closed at the end of the year?
revenues, expenses, and Owner, Withdrawals
assets, liabilities, and Owner, Withdrawals
revenues, expenses, and owner's equity
assets, liabilities, and owner's equity
Which of the following are NOT included in a post-closing trial balance?
Revenues and expenses
Owner, Capital and liabilities
Owner, Capital and assets
Assets and liabilities
Which of the following is a permanent account?
Wages Expense
Salaries Payable
Service Revenue
Utilities Expense
Which of the following accounts will be included in a post-closing trial balance?
Interest Payable
Service Revenue
Utilities Expense
Interest Expense
The financial statements are prepared from the ________.
statement of owner's equity
adjusted trial balance
unadjusted trial balance
chart of accounts
The following is the adjusted trial balance for Baker Services.
There were no new capital contributions during the year. After the closing entries are posted, what is the balance in Baker, Capital?
$209,300
$24,500
$1,500
$163,300
Regarding a classified balance sheet, which of the following statements is correct?
Account balances are listed from the highest amount to the lowest amount.
Assets are listed in alphabetical order.
Accounts are classified by their purchase dates.
Assets are listed in the order of their liquidity.
The net income of Hendley Company for the year is $25,000. Withdrawals during the year were $30,000. No new capital contributions were made during the year. Which of the following statements is TRUE?
Hendley, Capital will remain the same.
Hendley, Capital account increases by $30,000.
Hendley, Capital account decreases by $25,000.
Hendley, Capital account decreases by $5,000.
Which of the following is a measure of how quickly an item can be converted to cash?
Return on assets ratio
Accounting cycle
Debt ratio
Liquidity
Patents, copyrights, and trademarks are examples of ________.
long-term investments
intangible assets
fixed assets
short-term investments
Which financial statement is prepared last?
The financial statements can be prepared in any order.
statement of owner's equity
income statement
balance sheet (statement of financial position)
What is the net result if the amount of net income for the year is less than the amount of the owner's withdrawals?
Owner, Capital increases
Cash balance decreases
Owner, Capital decreases
Cash balance increases
An account that is NOT closed at the end of the period is called a (an) ________.
permanent account
revenue account
expense account
temporary account
Which of the following entries is necessary to close the appropriate depreciation account at the end of the year?
debit Depreciation Expense and credit Income Summary
debit Income Summary and credit Accumulated Depreciation
debit Accumulated Depreciation and credit Income Summary
debit Income Summary and credit Depreciation Expense
Which of the following is TRUE of a completed worksheet?
The total of all the debit columns is equal to the total of all the credit columns.
The total debits in the unadjusted trial balance column equal the total debits in the adjusted trial balance column.
The total debits in the income statement column equal the total credits in the balance sheet column.
The total debits in the income statement column equal the total debits in the balance sheet column.
Which of the following should not be considered when comparing the Adjusted Trial Balance to the Post-Closing Trial Balance to ensure that no errors were made in the closing process?
The account balances on each of the trial balances are the same.
Account balances above Owner, Capital are the same on the Adjusted Trial Balance and the Post-Closing Trial Balance.
Account balances below Owner, Capital are zero on the Post-Closing Trial Balance but not the Adjusted Trial Balance.
The Owner, Capital account balance on the post-closing trial balance matches the Owner, Capital account balance on the balance sheet.
Closing entries are journalized and posted ________.
after preparing the post-closing trial balance
throughout the accounting period
after preparing the financial statements
before posting the adjusting entries
Martinville Company earned revenues of $20,000 and incurred expenses of $4,000. Martinville withdrew $3,500 for personal use. What is the balance in the Income Summary account prior to closing net income or loss to the Martinville, Capital account?
credit balance of $16,000
credit balance of $20,000
debit balance of $12,500
debit balance of $16,000