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Exam 4: Completing the Accounting Cycle

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Question 61

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Which of the following statements is true of the worksheet?

A) The worksheet is a ledger.
B) The worksheet is a document used to summarize data to prepare the financial statements.
C) The worksheet is a financial statement issued to the public to communicate the financial results of the company.
D) The worksheet is a journal.

E) None of the above
F) A) and D)

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Question 62

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The adjusting process zeroes out all revenues and all expenses.

A) True
B) False

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Question 63

Multiple Choice

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Which of the following accounts are included in an income statement?

Refer to the following adjusted trial balance. What will be the final ending balance in the Owner's Name, Capital account after posting the closing entries?

A balance sheet that lists the assets above the liabilities and owner's equity sections is a(n) :

Which of the following categories of accounts are temporary accounts that are closed at the end of the year?

The Owner's Name, Withdrawals account is a permanent account.

The closing process helps in measuring each period's net income separately from all other periods.

In the last step of the closing process, the Owner's Name, Withdrawals account is closed to the Owner's Name, Capital account.

On December 31, 2014, Axle Services prepared the following accrual adjustment: Axle paid salaries amounting to $200 on January 07, 2015 for salaries due in 2014. Journalize the entries for January 1, 2015 and January 7, 2015, assuming Axle uses reversing entries.

On December 31, 2014, Axle Services prepared the following accrual adjustment: Axle uses reversing entries. Prepare the reversing entry that would be prepared on January 1, 2015?

The smaller the current ratio, the higher is the ability of a firm to repay its current debts.

Only temporary accounts appear on the post-closing trial balance.

Reversing entries ease the burden of accounting for transactions in a later period.

Generally Accepted Accounting Principles (GAAP)require every organization to prepare reversing entries.

Rose Company earned revenues of $15,000 and incurred expenses of $9,000. The withdrawals of Mary Rose, the owner, were $3,000. What is the balance in the Income Summary account prior to closing net income or loss to the Rose, Capital account?

Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet?

Clear Cleaning Services pays out wages every week on Friday. Payroll expense totals $4,000 per week, based on a 5-day week. The month of June ended on a Thursday. On Thursday, June 30, Clear made the following accrual adjustment: At the same time, they prepared the following reversing entry to be booked on July 1: On Friday afternoon, when wages were paid out, what journal entry was made?

Which of the following accounts would appear in the income statement debit column?

The following is the adjusted trial balance as of December 31, 2015 of Martin Watch Company: Provide the closing entry for expenses.