Question 1

A work sheet is a substitute for the financial statements.

Accepted Answer

A) True 
 B)False

Question 2

Reversing entries are:

Accepted Answer

A)   Optional.
B)   Linked to accrued assets and liabilities that were created by adjusting entries at the end of the previous accounting period.
C)   Used to simplify a company's record keeping.
D)   Dated the first day of the next accounting period.
E)   All of these answers are correct.F) A) and D)
G) All of the above

Question 3

Which of the following is the final step in the accounting cycle?

Accepted Answer

A)   Journalizing.
B)   Preparing an adjusted trial balance.
C)   Preparing a post-closing trial balance.
D)   Preparing the statements.
E)   Preparing a work sheet.F) B) and D)
G) D) and E)

Question 4

Which of the following statements is incorrect?

Accepted Answer

A)   Working papers are invaluable tools of the accountant.
B)   The work sheet shows the effects of adjustments on the account balances.
C)   After the work sheet is completed,the work sheet information is used to prepare the financial statements.
D)   On the work sheet,the accountant sorts the adjusted amounts into columns according to whether the accounts are used in preparing the unadjusted trial balance or the adjusted trial balance.
E)   The work sheet is an optional step in the accounting cycle.F) A) and D)
G) A) and E)

Question 5

After posting the entries to close all revenue accounts and all expense accounts,the Income Summary account of Waif Services has a $4,000 debit balance.This shows that Waif Services earned a net income of $4,000.

Accepted Answer

A) True 
 B)False

Question 6

On the work sheet,a loss is indicated if the total of the Income Statement Debit column exceeds the total of the Income Statement Credit column.

Accepted Answer

A) True 
 B)False

Question 7

The withdrawals account is normally closed by debiting it.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is incorrect?

Accepted Answer

A)   Permanent accounts are another name for nominal accounts.
B)   Temporary accounts carry a zero balance at the beginning of each accounting period.
C)   The Income Summary account is a temporary account.
D)   Real accounts remain open as long as the asset,liability,or equity items recorded in the accounts continue in existence.
E)   Permanent accounts are another name for real accounts.F) A) and D)
G) A) and C)

Question 9

The eight recurring steps performed each accounting period,starting with recording transactions in the journal and continuing through the post-closing trial balance,is called the:

Accepted Answer

A)   Accounting period.
B)   Operating cycle.
C)   Accounting cycle.
D)   Closing cycle.
E)   Natural business year.F) C) and E)
G) A) and E)

Question 10

Assets are classified into current assets,investments,property,plant and equipment,and intangible assets.

Accepted Answer

A) True 
 B)False

Question 11

The aim of a post-closing trial balance is to verify that (1)total debits equal total credits for temporary accounts and (2)all temporary accounts have zero balances.

Accepted Answer

A) True 
 B)False

Question 12

Discuss the purpose of a post-closing trial balance.

Accepted Answer

A post-closing trial balance is a list o...

Question 13

In order,the last four steps in the accounting cycle include preparing the adjusted trial balance,preparing financial statements,preparing adjusting entries and preparing closing entries.

Accepted Answer

A) True 
 B)False

Question 14

Explain why temporary accounts are closed each period.

Accepted Answer

Temporary accounts are closed at the end...

Question 15

The first step in the accounting cycle is to analyze and record transactions during the accounting period.

Accepted Answer

A) True 
 B)False

Question 16

If interim financial statements are required,adjusting entries must be journalized and posted to obtain the adjusted data needed for their preparation.

Accepted Answer

A) True 
 B)False

Question 17

Journal entries recorded at the end of each accounting period to prepare the revenue,expense,and withdrawals accounts for the upcoming year and to update the owner's capital account for the events of the year just finished are:

Accepted Answer

A)   Adjusting entries.
B)   Closing entries.
C)   Final entries.
D)   Work sheet entries.
E)   None of these answers is correct.F) B) and D)
G) A) and B)

Question 18

The ending balance of owner's capital is calculated as:

Accepted Answer

A)   Owner's capital account balance plus net income minus the withdrawals account balance.
B)   Owner's capital account balance minus net loss plus the withdrawals account balance.
C)   Net income minus the withdrawals account balance.
D)   Assets plus liabilities.
E)   None of these answers is correct.F) B) and D)
G) B) and C)

Question 19

A trial balance prepared after the adjusting and closing entries have been posted,and which is the final step in the accounting cycle,is a(n) :

Accepted Answer

A)   Unadjusted trial balance.
B)   Post-closing trial balance.
C)   Book of final entry.
D)   Adjusted trial balance.
E)   Work sheet.F) B) and E)
G) B) and D)

Question 20

The items that follow appeared in the Income Statement columns of the work sheet prepared for a sole proprietorship at year-end,December 31,2015.Also,the owner's withdrawals account was debited for $12,000 during the year.Prepare the necessary closing entries at December 31.

Accepted Answer

The answer of The items that follow appeared in the...

Exam 4: Completing the Accounting Cycle and Classifying Accounts

Explain why temporary accounts are closed each period.

Correct AnswerverifiedTemporary accounts are closed at the end...View AnswerShow Answer

Reversing entries are:

Correct AnswerverifiedShow Answer

If interim financial statements are required,adjusting entries must be journalized and posted to obtain the adjusted data needed for their preparation.

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

In order,the last four steps in the accounting cycle include preparing the adjusted trial balance,preparing financial statements,preparing adjusting entries and preparing closing entries.

Correct AnswerverifiedShow Answer

A trial balance prepared after the adjusting and closing entries have been posted,and which is the final step in the accounting cycle,is a(n) :

Correct AnswerverifiedShow Answer

The withdrawals account is normally closed by debiting it.

Correct AnswerverifiedShow Answer

The ending balance of owner's capital is calculated as:

Correct AnswerverifiedShow Answer

Journal entries recorded at the end of each accounting period to prepare the revenue,expense,and withdrawals accounts for the upcoming year and to update the owner's capital account for the events of the year just finished are:

Correct AnswerverifiedShow Answer

On the work sheet,a loss is indicated if the total of the Income Statement Debit column exceeds the total of the Income Statement Credit column.

Correct AnswerverifiedShow Answer

The eight recurring steps performed each accounting period,starting with recording transactions in the journal and continuing through the post-closing trial balance,is called the:

Correct AnswerverifiedShow Answer

The aim of a post-closing trial balance is to verify that (1)total debits equal total credits for temporary accounts and (2)all temporary accounts have zero balances.

Correct AnswerverifiedShow Answer

Which of the following is the final step in the accounting cycle?

Correct AnswerverifiedShow Answer

Discuss the purpose of a post-closing trial balance.

Correct AnswerverifiedA post-closing trial balance is a list o...View AnswerShow Answer

Which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

A work sheet is a substitute for the financial statements.

Correct AnswerverifiedShow Answer

The items that follow appeared in the Income Statement columns of the work sheet prepared for a sole proprietorship at year-end,December 31,2015.Also,the owner's withdrawals account was debited for $12,000 during the year.Prepare the necessary closing entries at December 31.

Correct AnswerverifiedShow Answer

Assets are classified into current assets,investments,property,plant and equipment,and intangible assets.

Correct AnswerverifiedShow Answer

After posting the entries to close all revenue accounts and all expense accounts,the Income Summary account of Waif Services has a $4,000 debit balance.This shows that Waif Services earned a net income of $4,000.

Correct AnswerverifiedShow Answer

The first step in the accounting cycle is to analyze and record transactions during the accounting period.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Temporary accounts are closed at the end...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A post-closing trial balance is a list o...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified