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    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2

Match the Item on the left with the definition on the right.
 

   
Select the statement below that explains how to use the Income Summary account.
 
The Income Summary account is used during the closing process to facilitate the closing of revenue and expense accounts.
 
A company had the following: selected balances:
 
Account                               Debit                     Credit
Service Revenue                                               $8,000
Rental Revenue                                                $2,000
wages Expense $500                                   
Utilities Expense              $100                                    
 
The third closing journal entry, after closing revenues and expenses, would Include which of the following?
 
Debit Income Summary $9,400;
and credit Owner's Capital $9,400.
   
Closing means to transfer account balances from temporary (asset/liability/permanent/temporary)
accounts so that they will start with a zero (contra/larger/zero) balance at the beginning of the next period.
   
Which of the following accounts would be sorted from the Adjusted Trial Balance of a work sheet
to the Balance Sheet & Statement of Owner's Equity columns on a work sheet?
 
Cash; Accounts payable; Owner, Withdrawals
   
The Income Summary account can be defined as which of the following? (Check all that apply.)
 

   
Describe your understanding of the closing process by identifying the correct steps below. (Check all that apply.)
 

   
Which of the following defines long-term liabilities?
 
Long-term liabilities are debts of a business that are not due to be settled within one year.
   
Review the following totals from a work sheet Based on these totals,
the company experienced (a) net (income / loss) loss of $2,500.
 

   
Which of the lists below contains only permanent accounts?
 

   
A classified balance sheet has several categories for assets and liabilities including: (Check all that apply.)
 

   
The journal entry to close all of a company's expense accounts would include a credit (debit/credit) to each
of the expense accounts and a corresponding debit (debit/credit) to the
Income summary (statement; summary) account
   
Which of the following lists contains only temporary accounts?
 

   
Select the statement(s) below which correctly describe how to use the work sheet in the adjustment process.
(Check all that apply.)
 

   
The purpose of the closing process is to reset temporary (temporary / permanent)
account balances to zero and to transfer the changes in all of these accounts to the
Owner, capital (Capital/Summary/Withdrawal) account
   
Explain the required steps to complete a work sheet by placing the following in the correct order of completion.
(Put the first step at the top.)
 

   
Which of the following is correct regarding a work sheet?
 
Each set of column totals must balance on the Trial Balance columns,
Adjustments columns and the Adjusted Trial Balance columns.
   
Current assets are:
 
Cash and other resources that are expected to be sold, collected or used Within one year.
   
The closing process takes place at the end (end/beginning) of an accounting period, after the
adjusted(adjusted/unadjusted) trial balance is prepared and after (after/before)
the financial statements are prepared.
   
Which of the statements below is correct regarding the difference between a temporary account and a permanent account?
 
 

   
The following categories are on a classified balance sheet. list them in the order that they would appear.
 
1. Current assets
2. Long-term investments
3. Plant assets
4. Intangible assets
5. Current liabilities
6. Long-term liabilities
   
How can you add adjusted accounts to a work sheet when they did not appear on the trial balance?
 

   
Which of the following statements is (are) correct about completing a work sheet? (Check all that apply.)
 
Journalizing and posting adjusting entries from the work sheet is aided by which of the following?

   
A company had the following selected balances:
 
Account                                               Debit                     Credit  
Service Revenue               $                                             4,000   
Renta l Revenue               $                                             2,000   
Wages Expense                                 $             500                       
Utilities Expense              $             100                                       
Owner's Withdrawals    $             80                                          
 
Demonstrate the last closing journal entry to close the Withdrawals account by selecting the correct answer below.
 
Debit Owner's Capital $80; Credit Owner's Withdrawals $80
   
The adjusted (adjusted/unadjusted) trial balance is prepared by combining the adjustments in the
Adjustments columns with the balances for each account listed on the unadjusted (adjusted/unadjusted) trial balance.
   
Some of the steps in the accounting cycle are listed below. Place them in the correct order of use.
 
1. Journalize transactions into the journal.
2. Journalize and post the adjusting entries.
3. Prepare the adjusted trial balance.
4. Prepare the financial statements.
5. Journalize and post-closing entries.
6. Prepare post-closing trial balance.
   
The steps in the closing process are listed on the right Match them to the correct order in which they would be performed (on the left).
 

   
Review the following statements and select which is correct regarding a work sheet and formal financial statements.
 
The Withdrawal's account balance will be used in preparing the statement of owner's equity.
   
Current items can be described as those expected to come due within one year (month/year) and are
listed in the order of how quickly (quickly/slowly) they could be converted to or paid in cash.
   
Which of the statements below is (are) correct regarding the accounting cycle? (Check all that apply.)
 

   
A company had the following selected balances:
 
Account                                               Debit                     Credit  
Service Revenue               $                                             4,000   
Rental Revenue                $                                             2,000   
Wages Expense                 $             500                                       
Utilities Expense              $             100                                       
Owner, Withdrawals      $             80                                          
 
The first closing journal entry would include which of the following?
 
A credit to Income Summary for $6,000.
   
Demonstrate your knowledge of preparing a post-closing trial balance by selecting the accounts
below that would be included on it. (Check all that apply.)
 
Liability accounts
Permanent accounts
Asset accounts
   
What are the benefits of using a work sheet? (Check all that apply.)
 

   
Select the statement below that describes a post-closing trial balance.
 
It is a listing of all permanent accounts and their balances after closing.
   
Accounting (with/without) without reversing entries for accrued salaries will require a debit to salaries expense,
a debit to a salaries payable and a credit to cash for the first payment of salaries in the next period.
   
Identify the accounts below that would be classified as a long-term investment. (Check all that apply.)
 

   
Identify which of the accounts below would be classified as a plant asset account (Check all that apply.)
 

   
Identify the accounts below that would be classified as intangible assets on a classified balance sheet (Check all that apply.)
 

   
Review the statements be l ow regarding the closing process under U.S. GAAP and IFRS. Which is correct?
 

   
Describe an unclassified balance sheet:
 
An unclassified balance sheet Is one whose Items are broadly grouped into assets, liabilities, and equity.
   
Using the financial information of ABC Co. below, compute Its current ratio for the period.
 
$ in millions                       2011    
Current assets   $520    
Current liabilities             $128    
Long-term liabilities       $250   
 
4.06
   
Choose the formula below that is used to calculate the current ratio of a business.
 
Current assets divided by current liabilities.
   
Determine which of the statements below are correct regarding the current ratio. (Check all that apply.)
 

   
Which of the following statements correctly describes what a work sheet is? (Check all that apply.)
 

   
Which of the accounts below would appear in the equity section of a classified balance sheet?
 
Owner, Capital
   
Select the statement below that describes how to Indicate an account has an abnormal balance.
 
Circle the abnormal balance.
   
Using the financial information of ABC Co. below, evaluate the company's current ratio. Select all answers which apply.
 
$ in millions                                       2013                    
Current assets   $             620                       
Current liabilities             $             430                       
Current ratio                                      1.44                      
Industry current ratio     1.28                      
 
The company's ability to pay short-term obligations is not in doubt since its current ratio I greater than 1.0.
The company's ratio is above the industry's ratio, so this company is able to cover its debt better than others in this industry.
   
The entries to close the revenue and expense accounts for Jefferson Company are shown below. The
next closing entry In the closing process would Include: {Check all that apply.)
 

 

   
Identify which of the following steps in the accounting cycle is optional.
 

   
Review the statements below and select the one which is correct regarding the effect that reversing entries have on financial statements.
 

   
Review the statements below and select the items that are correct regarding the operating cycle for a business. (Check all that apply.)
 

   
Select the statements below that are correct regarding reporting assets and liabilities under U.S. GAAP vs. IFRS. (Check all that apply.)
 

   
Describe the general ledger after adjusting and closing entries have been posted. (Check all that apply.)
 

   
Recall the column headings of a work sheet used to prepare financial statements.
Which of the following items would be seen on such a worksheet. (Check all that apply.)
 

   
Select the statements below that describe the purpose of a post-closing trial balance. (Check all that apply.)
 
One purpose is to verify that total debits equal total credit for permanent accounts.
One purpose is to verify that all temporary accounts have zero balances.
 
When is a reversing entry made?
 
It is made on the first day of a new accounting period.
   
On December 31, AB Consulting recorded two days' wages of $100 in an adjusting entry which included a debit to Wages Expense and a
credit to Wages Payable. On January 1, the accountant prepared a reversing entry which included which of the following?
 
Debit Wages Payable; credit Wages expense $100.
   
A reversing entry can be described as a(n): (Check all that apply.)
 

   
The adjusting entry to record the revenue earned by the seller fulfilling its obligation results in a(n) ________ to the Deferred Revenue account.
 
Decrease
   
Which of the following is incorrect regarding the income tax payable account?
The account represents tax refunds due to the company.
   
Which of the following is true about the adjusting entry to record the revenue for which the seller has performed of its obligations but not yet collected?
 
Assets will increase
Stockholders' equity will increase
   
Place the steps taken at the end of the accounting period to complete
the financial statement preparation process in the correct order.
 
1. Prepare the adjusting entries
2. Prepare the adjusted trial balance
3. Prepare the financial statements
   
On June 30, Daily Kneads paid 12000 in advance for insurance coverage beginning July 1 through June 30. Match each line item with the
correct amount that would be reported in the following month, July, and on which July financial statement the line item would be reported.
 
Insurance: $1,000 on the income statement
Prepaid insurance: $11,000 on the balance sheet.
   
Which of the following statements s correct regarding the adjustment for salaries and wages accrued but not paid at the end of the accounting period?
 
Salaries and wages expense will increase by the amount of the unpaid
salaries and wages.
   
Bristol, INC. paid $800 for a 4-month insurance policy on August 1 of the current year.
On August 31, Bristol, Inc. made an adjusting entry to account for the insurance that expired during the month of August.
The adjusting entry contained a debit to Insurance Expense in the amount of ___ and a credit to Prepaid Insurance in the amount of ___.
The remaining balance in the Prepaid Insurance account after the adjustment was ___?
 
$200, $200, $600
   
Which of the following is true regarding depreciation of equipment?
 
Accumulated depreciation is increased as the equipment is used causing the carrying value to decrease on the balance sheet.
   
Accumulated depreciation is a contra-account that reports the amount of
 
usefulness used as of the balance sheet date.
   
Depreciation is reported in Accumulated Depreciation which netted
 
against the related equipment account on the balance sheet.
   
Adjustments ensure that ____ balances are reported at amounts amounts representing the economic benefits that remain at
the end of the period and will be used up in future periods.
 
Asset
   
The adjustment for supplies used during the period will result in a(n) ___ to the supplies expense account.
 
Increase
   
In an accrual adjustment for expenses incurred but not paid, a liability is ___
 
Increased because cash will be paid in the future due to the expense incurred.
   
As of December 31 (the end of the accounting period), ABC Company has a profit before tax of $12,000. The company's tax rate is 25%.
The adjustment will include a(n) ___ of $___ to Income Tax Expense.
 
Debit; $3,000
   
The adjusting entry to record depreciation on equipment includes a ___.
 
Debit to depreciation expense.
Credit to accumulated depreciation.
   
Supplies Expense
 
Amount used and reported on the income statement.
   
Supplies
 
Amount remaining and reported on the balance sheet.
   
Accounts Payable
 
Amount owed for supplies purchased on an account.
   
Interest incurred, but not yet paid during an accounting period, should be recorded as an expense and a(n) ___
 
Liability
   
The accounts receivable account should be ___ when adjusting at the end of the period for any revenues from fulfilling obligations
to buyers which has not yet been collected or recorded.
 
Increased
   
Prepaid expenses, such as prepaid rent, should be ___ by the benefits that were used up during the accounting period.
 
Decreased
   
Which of the following account balances will typically be increased as a result of adjusting entries?
 
Interest payable.
Supplies expense.
   
At the end of the accounting period, adjusting entries are required.
Place the steps in the adjustment process in the correct order.
 
1. Use the unadjusted trial balance to determine the accounts requiring adjustment.
2. Record and post adjusting entries.
3. Prepare an adjusted trial balance to check the equality of the debits and credits.
4. Prepare financial statements
5. Record closing journal entries and post to the accounts.
6. Prepare a post-closing trial balance.
   
Accumulated Depreciation has a normal ___ balance which indicates that it ___ Total Assets.
 
Credit; decreases
   
The entry to close Service Revenue to Retained Earnings includes a ___
 
Debit to Service Revenue
Credit to Retained Earnings
   
A closing entry may include a ___
 
Credit to Wages Expense
   
Adjusting entries are made at the ___ of the accounting period, while daily transactions are made throughout the accounting period.
 
End
   
Adjusting entries to adjust Supplies or Prepaid Rent have which of the following effects?
 
Total assets is decreased on the balance sheet.
The carrying value of the assets are decreased.
Total expenses on the income statement are increased.
   
Deferral adjustment affect the balance sheet by ___
 
Decreasing assets for amounts used and liabilities for amounts of services/goods delivered to customers.
   
The accrual adjustment recorded to adjust revenues not yet collected will cause ___
 
Assets to increase
   
Salaries and Wages Payable is recorded for salaries and wages incurred, but not yet ___ to employees, at the end of the accounting period.
 
Paid
   
After the adjustments have been completed, the balance in the "Salaries and Wages Expense" account represents ___
Total salaries and wages, paid and unpaid, that have been incurred during the accounting period.
   
Which of the following types of transactions represent deferral adjustments that are recorded to adjust for amounts expired or
used during the period?
 
Decrease to prepaid insurance and increase to insurance expense.
Decrease to supplies and increase to supplies expense.
   
Net income (or loss) is recorded in the retained earnings account when ___ and ___ accounts are closed and transferred into
retained earnings.
 
Revenue; expense
   
Accrual adjustments are needed when a company has provided goods or
services to customers or incurred an expense but ___ has not been exchanged.
 
Cash
   
After all closing process, which accounts will have zero balances?
 
Revenues, expenses, dividends, all temporary accounts
   
Beauty and the Bistro, Inc. had $5,000 of supplies available to use during the year. At the end of the year, it recorded an adjusting
entry for $4,500 for the amount used during the year. Supplies on the balance sheet equals ___
 
$500
   
The seller's adjusting entry to record the revenue earned by fulfilling its obligation to its buyers which had been collected to advance
requires a ___ (debit/credit) to Deferred Revenue and a ___ (debit/credit) to Sales Revenue.
 
Debit; Credit
   
Why is it necessary to make adjustments to revenue accounts at the end of the accounting period?
 
Revenues the seller has performed of its obligations but not yet billed to Accounts Receivable, should be recorded as a revenue.
   
Deferred Revenue should be reduced for any portion the seller has
 
fulfilled its obligations during the current period.
   
What is the purpose of the depreciation adjustment for long-lived assets?
 
Depreciation allows the company to allocate the cost of an asset over the years the asset benefits the company.

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2