Deck 4: Completing the Accounting Cycle

Question 1

Which of the following is TRUE of a completed worksheet?

A) The total debits in the trial balance column equal the total debits in the adjusted trial balance column.
B) The total debits in the income statement column equal the dividends paid.
C) The total debits in the income statement column equal the total debits in the balance sheet column.
D) The total debits equal the total credits in each column.

Answer 1

D

Question 2

Which of the following statements is TRUE concerning the worksheet?

A) The worksheet helps accountants make the adjusting entries.
B) The worksheet helps accountants close the accounts.
C) The worksheet helps accountants prepare the financial statements.
D) The worksheet helps accountants do all of the above.

Answer 2

D

Question 3

Which of the following is TRUE if the income statement debit column exceeds the income statement credit column on a worksheet?

A) The company has a net loss.
B) The capital account increased during the period.
C) The company has net income.
D) Liabilities are greater than assets.

Answer 3

A

Question 4

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

A) Rent revenue
B) Insurance expense
C) Salary payable
D) Equipment

Question 5

The adjusted balance in the service revenue account is copied to the credit column of the income statement worksheet.

Question 6

Net income is entered as the balancing amount in the debit side of the income statement columns and the credit side of the balance sheet columns of the worksheet.

Question 7

The adjusting entry for depreciation would include a:

A) debit to Depreciation expense and a credit to Cash.
B) debit to Accumulated depreciation and a credit to Depreciation expense.
C) debit to Accumulated depreciation and a credit to the asset.
D) debit to Depreciation expense and a credit to Accumulated depreciation.

Question 8

Which of the following statements is TRUE about the worksheet?

A) Net income is recorded in the income statement credit column.
B) Net income is recorded in the adjusted trial balance debit column.
C) Net income is recorded in the income statement debit column.
D) Net income is recorded in the balance sheet debit column.

Question 9

The Drawing account is copied to the income statement columns on the worksheet.

Question 10

Where does Net income appear on a worksheet?

A) Net income appears only in the income statement debit column.
B) Net income appears in the balance sheet credit column and in the income statement debit column.
C) Net income appears in the income statement credit column and in the balance sheet debit column.
D) Net income appears only in the balance sheet credit column.

Question 11

In which of the columns of the worksheet would a net loss be found?

A) In the balance sheet credit column and the income statement debit column
B) In the balance sheet debit column and the income statement credit column
C) In the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column
D) In the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column

Question 12

Net income (loss)is the difference between the total debits and the total credits in the income statement columns.

Question 13

What is TRUE if the income statement credit column exceeds the income statement debit column on a worksheet?

A) The company has a net income.
B) The company has a net loss.
C) The capital account decreased during the period.
D) Total liabilities exceed total assets.

Question 14

The purpose of the depreciation adjustment is to:

A) spread the cost invested in an asset over its useful life.
B) show the current market value of the asset.
C) set up a reserve fund for purchasing a new asset.
D) expense the full amount of the asset in the year purchased.

Question 15

Please refer to the worksheet below. How much was the Net income?

A) $42,000
B) $13,600
C) $22,020
D) $28,400

Question 16

The last two columns generally found on the right side of the worksheet are the income statement columns.

Question 17

Which of the following is the LAST step of preparing the worksheet?

A) Compute each account's adjusted balance by combining the trial balance and adjustment figures. Enter each account's adjusted amount in the adjusted trial balance columns.
B) On the income statement column, compute net income. Enter net income as the balancing amount on the income statement and balance sheet columns. Total the income statement and balance sheet columns.
C) Copy the asset, liability, and owner's equity amounts from the adjusted trial balance to the balance sheet columns. Copy the revenue and expense amounts to the income statement columns. Total each column.
D) Enter the adjusting entries in the adjustments columns, and total the amounts.

Question 18

Which of the following statements is TRUE concerning 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.
D) The worksheet is a journal.

Question 19

Prepaid rent in the worksheet's trial balance column is $4,000.Prepaid rent in the balance sheet column is $2,000.Which of the following entries would have caused this difference?

A) A $2,000 debit entry to Prepaid rent in the worksheet's adjustments column
B) A $2,000 credit entry to Rent expense in the worksheet's adjustments column
C) A $2,000 credit entry to Prepaid rent in the worksheet's adjustments column
D) A $2,000 debit entry to Cash in the worksheet's adjustments column

Question 20

Interest expense in the worksheet's trial balance column is $3,000.Interest expense in the income statement column is $7,000.Which of the following entries would have caused this difference?

A) A $7,000 credit to Interest expense in the worksheet's adjustments column
B) A $7,000 credit to Interest payable in the worksheet's adjustments column
C) A $4,000 debit to Interest expense in the worksheet's adjustments column
D) A $4,000 credit to Interest expense in the worksheet's adjustments column

Question 21

Please refer to the worksheet below.Please complete the worksheet,including the balancing amounts in the last row.

Question 22

The following is the adjusted trial balance from the worksheet for Tuttle Photography,Inc.
Tuttle Photography
Worksheet
For the Year Ended December 31,2013
$\begin{array}{|l|r|c|}\hline\text { Account } &{\text { Debit }} &\text { Credit }\\\hline \text { Cash } & \$ 15,000 \\\hline \text { Accounts receivable } & 30,000 \\\hline \text { Prepaid insurance } & 7,500 \\\hline \text { Office supplies } & 3,200 \\\hline \text { Land } & 40,000 \\\hline \text { Building } & 160,000 \\\hline \text { Accumulated depreciation } & & \$ 12,000 \\\hline \text { Equipment } & 75,000 &\\\hline \text { Accumulated depreciation } & & 8,500 \\\hline \text { Accounts payable } & & 12,000 \\\hline \text { Salaries payable } & & 2,000 \\\hline \text { Unearned service revenue } & & 25,000 \\\hline \text { Mortgage payable } & & 100,000 \\\hline \text { R. Tuttle, capital } & & 21,290 \\\hline \text { R. Tuttle, drawing } & 23,000 \\\hline \text { Service revenue } & \\\hline \text { Salaries expense } & 61,000 \\\hline \text { Depreciation expense } & 6,150 \\\hline \text { Supplies expense } & 14,040 \\\text { Innsurance expense } & 14,000 \\\hline \text { Utilities expense } & 20,900 \\\hline & \$ 469,790 & \$ 469,790 \\\hline\end{array}$ Using the information from the worksheet above,prepare a statement of owner's equity for Tuttle Photography.

Question 23

Please refer to the worksheet below.Enter the following adjusting entry into the worksheet:
At year-end,the company records $240 of depreciation expense.

Question 24

Please refer to the partially completed worksheet below: How much was the Net income?

A) $42,000
B) $13,600
C) $22,020
D) $28,400

Question 25

Please refer to the worksheet below.Enter the following adjusting entry into the worksheet:
At year-end,the company has earned $2,000 of service revenue from a client,but has not yet completed the job,or received a payment.

Question 26

Which of the following accounts would appear in the balance sheet debit column?

A) Unearned service revenue
B) Accumulated depreciation
C) Service revenue
D) Prepaid insurance

Question 27

Using the following worksheet for the Alcazar Service Co.,please prepare an income statement.The data are for the year ended December 31,2012.

Question 28

Please refer to the worksheet below: Post adjustments needed according to the information below, and complete the worksheet.
? At year-end, the company has earned $2,000 of service revenue from a client, but has not yet completed the job, or received a payment.
? At year-end, the company owes $180 of salaries to its staff that it has not paid yet.
? At year-end, the company has only $20 of supplies left.
? At year-end, the company records $240 of depreciation expense.

Question 29

Please refer to the worksheet below.Adjusting entries have been posted.Calculate the adjusted balances for all accounts and enter them in to the columns for Adjusted Trial Balance.

Question 30

The following is the adjusted trial balance from the worksheet for Tuttle Photography.
Tuttle Photography
Worksheet
For the Year Ended December 31,2013
$\begin{array}{|l|r|c|}\hline\text { Account } &{\text { Debit }} &\text { Credit }\\\hline \text { Cash } & \$ 15,000 \\\hline \text { Accounts receivable } & 30,000 \\\hline \text { Prepaid insurance } & 7,500 \\\hline \text { Office supplies } & 3,200 \\\hline \text { Land } & 40,000 \\\hline \text { Building } & 160,000 \\\hline \text { Accumulated depreciation } & & \$ 12,000 \\\hline \text { Equipment } & 75,000 &\\\hline \text { Accumulated depreciation } & & 8,500 \\\hline \text { Accounts payable } & & 12,000 \\\hline \text { Salaries payable } & & 2,000 \\\hline \text { Unearned service revenue } & & 25,000 \\\hline \text { Mortgage payable } & & 100,000 \\\hline \text { R. Tuttle, capital } & & 21,290 \\\hline \text { R. Tuttle, drawing } & 23,000 \\\hline \text { Service revenue } & \\\hline \text { Salaries expense } & 61,000 \\\hline \text { Depreciation expense } & 6,150 \\\hline \text { Supplies expense } & 14,040 \\\text { Innsurance expense } & 14,000 \\\hline \text { Utilities expense } & 20,900 \\\hline & \$ 469,790 & \$ 469,790 \\\hline\end{array}$ Using the information provided in the worksheet above,prepare an income statement for Tuttle Photography.

Question 31

Please refer to the worksheet below.Enter the following adjusting entry into the worksheet:
At year-end,the company owes $180 of salaries to its staff that it has not paid yet.

Question 32

Please refer to the following partially completed worksheet:
How much was the Net income or Net loss?

A) Net income of $1,400
B) Net income of $27,000
C) Net loss of $1,400
D) Net loss of $28,400

Question 33

Please refer to the worksheet below.Enter the following adjusting entry into the worksheet:
At year-end,the company has only $20 of supplies left.

Question 34

Please refer to the partially completed worksheet below: How much was the Net income?

A) $42,000
B) $13,600
C) $22,020
D) $28,400

Question 35

Which of the following accounts would appear in the balance sheet credit column?

A) Prepaid insurance
B) Buildings
C) Unearned service revenue
D) Service revenue

Question 36

In which of the columns of the worksheet would Net income be found?

A) In the trial balance credit column, the adjusted trial balance credit column and the balance sheet credit column
B) In the trial balance debit column, the adjusted trial balance debit column and the balance sheet debit column
C) In the balance sheet debit column and the income statement credit column
D) In the balance sheet credit column and the income statement debit column

Question 37

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

A) Service revenue
B) Prepaid insurance
C) Unearned service revenue
D) Depreciation expense

Question 38

Which of the following does NOT appear on the worksheet?

A) Closing entries
B) Adjusted balances
C) Net income
D) Adjusting entries

Question 39

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

A) Unearned service revenue
B) Service revenue
C) Depreciation expense
D) Prepaid insurance

Question 40

The following is the adjusted trial balance from the worksheet for Tuttle Photography.
Tuttle Photography
Worksheet
For the Year Ended December 31,2013
Using the information from the worksheet above,prepare a balance sheet for Tuttle Photography.

Question 41

Revenue accounts and expense accounts are closed to the Income summary account.

Question 42

Beginning balance in Capital is $10,000.Revenues are $200,000.Expenses are $120,000.Withdrawals are $4,000.The ending balance in Capital is $86,000.

Question 43

Revenue accounts and expense accounts are closed to the Capital account.

Question 44

Accounts receivable is a permanent account.

Question 45

As part of the closing process,revenues and expenses are closed to a temporary account called Net income (loss).

Question 46

Beginning balance in Capital is $80,000.Revenues are $60,000.Expenses are $75,000.No withdrawals were taken.The ending balance in Capital is $65,000.

Question 47

Accounts payable is a temporary account.

Question 48

Using the following worksheet for Alcazar Service Co.,please prepare a statement of owner's equity.The
data are for the year ended December 31,2012.

Question 49

Supplies is a temporary account.

Question 50

Salaries payable is a permanent account.

Question 51

Beginning balance in Capital is $80,000.Revenues are $60,000.Expenses are $75,000.No withdrawals were taken.The ending balance in Capital is $95,000.

Question 52

Asset and liability accounts are closed to the Income summary account.

Question 53

Permanent accounts are NOT closed at the end of the period.

Question 54

Using the following worksheet for Alcazar Service Co.,please prepare a statement of owner's equity.The
data are for the year ended December 31,2012.

Question 55

Supplies expense is a temporary account.

Question 56

The last step in the closing process is to credit the Drawing account and debit the Capital account.

Question 57

Beginning balance in Capital is $10,000.Revenues are $200,000.Expenses are $120,000.Withdrawals are $4,000.The ending balance in Capital is $90,000.

Question 58

Capital is a temporary account.

Question 59

The adjusting process zeroes out all revenues and all expenses.

Question 60

Cash is a temporary account.

Question 61

Withdrawals is a permanent account.

Question 62

To what account is the balance in the Income summary account closed?

A) The Withdrawal account
B) The Net Income account
C) The Capital account
D) The Revenue account

Question 63

Which of the following accounts does NOT close at the end of the period?

A) Accumulated depreciation
B) Depreciation expense
C) Withdrawals
D) Sales revenues

Question 64

Revenues total $10,200.Expenses total $7,300.Withdrawals total $2,600.

-What is the balance in the Income summary account after closing Net income or loss to the Capital account?

A) Debit balance of $2,900
B) Credit balance of $300
C) Credit balance of $2,900
D) Balance of $0

Question 65

Where can closing entries be found?

A) In a company's general journal
B) On a company's statement of owner's equity
C) On a company's worksheet
D) On a company's balance sheet

Question 66

Depreciation expense is a temporary account.

Question 67

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

A) Assets, liabilities and withdrawals
B) Revenues, expenses and withdrawals
C) Assets, liabilities and capital
D) Revenues, expenses and capital

Question 68

Which of the following accounts will be closed by debiting the Income summary account?

A) Depreciation expense
B) Accounts payable
C) Service revenue
D) Accumulated depreciation

Question 69

Salary expense is a temporary account.

Question 70

Revenues total $10,200.Expenses total $7,300.Withdrawals total $2,600.

-What is the balance in the Income summary account prior to closing Net income or loss to the Capital account?

A) Credit balance of $300
B) Debit balance of $2,900
C) Credit balance of $2,900
D) Balance of $0

Question 71

What is the result if the amount of net income for the year is less than the amount of the withdrawals?

A) The Capital account increases.
B) The amount in the Cash account decreases.
C) The amount in the Cash account increases.
D) The Capital account decreases.

Question 72

Service revenue is a permanent account.

Question 73

Service revenue is a temporary account.

Question 74

Capital is a permanent account.

Question 75

Which is NOT an example of a temporary account?

A) Wages expense
B) Accumulated depreciation
C) Service revenue
D) Utilities expense

Question 76

Which of the following accounts will be closed by crediting the Income summary account?

A) Service revenue
B) Depreciation expense
C) Accounts payable
D) Accumulated depreciation

Question 77

Accumulated depreciation is a permanent account.

Question 78

Which of the following entries will be necessary to close the appropriate depreciation account at the end of the year?

A) Debit Accumulated depreciation and credit Income summary.
B) Debit Depreciation expense and credit Income summary.
C) Debit Income summary and credit Accumulated depreciation.
D) Debit Income summary and credit Depreciation expense.

Question 79

Which of the following accounts will still show a balance after the closing process is completed?

A) Withdrawal account
B) Expense accounts
C) Accumulated depreciation account
D) Service revenue account

Question 80

Which of the following accounts will be closed by debiting the Income summary account?

A) Withdrawals
B) Service revenue
C) Accounts receivable
D) Salary expense