Question 1

On April 1, 2019, Exceed Technologies paid $240,000 for rent on warehouse space one year in advance. If Above and Beyond makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 income statement for rent expense?

Accepted Answer

Rent expense = $240,000 × 9/12 = $180,000

Question 2

On April 1, 2019, Gilgen & Sons paid $60,000 for rent on warehouse space one year in advance. If Gilgen & Sons makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 balance sheet as prepaid rent?

Accepted Answer

Prepaid rent remaining = $60,000 × 3/12 = $15,000

Question 3

On April 1, 2019, Cooper paid $180,000 for rent on warehouse space one year in advance. If Justin makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 balance sheet as prepaid rent?

Accepted Answer

Prepaid rent remaining = $180,000 × 3/12 = $45,000

Question 4

On October 1, 2019, Feldman entered into a lease agreement to rent out its old warehouse space it was no longer using. This agreement calls for Feldman to receive $6,000 per month from the lessee, due and payable at the end of the 4-month lease term. At December 31, 2019, none of the rental payments from the lessee had yet been received.
If Feldman makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 balance sheet as rent receivable?

Accepted Answer

Rent receivable = $6,000 × 3 = $18,000

Question 5

On October 1, 2019, A. Karikomi entered into a lease agreement to rent out its old warehouse space it was no longer using. This agreement calls for Karikomi to receive $18,000 per month from the lessee, due and payable at the end of the 4-month lease term. At December 31, 2019, none of the rental payments from the lessee had yet been received.
If Kushner makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 balance sheet as rent receivable?

Accepted Answer

Rent receivable = $18,000 × 3 = $54,000

Question 6

Beth's Bagels has 6 employees who are paid $24 per hour. At December 31, 2019, each of Beth's employees had worked 18 hours which had not been paid or recorded. Prior to adjustments, the company's trial balance showed $171,400 in the wages expense account.
If Beth makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 income statement as wage expense?

Accepted Answer

Wage expense = 18 hours x 6 employees x $24 = $2,592 + $171,400 = $173,992

Question 7

Remi's Burritos has 6 employees who are paid $27 per hour. At December 31, 2019, each of Remi's employees had worked 18 hours which had not been paid or recorded. Prior to adjustments, the company's trial balance showed $192,825 in the wages expense account.
If Remi's Burritos makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 income statement as wage expense?

Accepted Answer

Wage expense = 18 hours x 6 employees x $27 = $2,916 + $192,825 = $195,741

Question 8

Beth's Bagels purchases its inventory, on account, daily. At December 31, 2019, the company had taken receipt of $80,000 of inventory from its suppliers which had not been recorded in the accounts.
If Beth makes the appropriate adjusting entry, how much will be reported on the December 31, 2019, balance sheet as accounts payable?

Accepted Answer

Accounts payable = $80,000

Question 9

Remi's Burritos purchases its inventory, on account, daily. At December 31, 2019, the company had taken receipt of $240,000 of inventory from its suppliers which had not been recorded in the accounts.
If Remi's Burritos makes the appropriate adjusting entry, how much will be reported on the December 31, 2019, balance sheet as accounts payable?

Accepted Answer

Accounts payable = $240,000

Question 10

Bee Corporation has the following normal account balances in its general ledger at the end of a period:
 Which of the following gives the correct entry required to close only the accounts above?

Accepted Answer

The closing process requires that revenue accounts are debited and retained earnings are credited for the amount equal to the revenue balance. The closing process also requires that expense accounts are credited and retained earnings debited for an amount equal to the expense balance. The net amount of retained earnings credited in this problem is equal to $510,000 (or $600,000 - $90,000), since revenues are greater than expenses.

Question 11

Sage Corporation has the following normal account balances in its general ledger at the end of a period:
 Which of the following gives the correct entry required to close only the accounts above?

Accepted Answer

The closing process requires that revenue accounts are debited and retained earnings are credited for the amount equal to the revenue balance. The closing process also requires that expense accounts are credited and retained earnings debited for an amount equal to the expense balance. The net amount of retained earnings credited in this problem is equal to $1,530,000 (or $1,800,000 - $270,000), since revenues are greater than expenses.

Question 12

A series of journal entries at the end of the accounting period to remove the balances from the temporary accounts so that they can accumulate data for the following accounting period are called:

Accepted Answer

An account that is closed is said to be closed to the account that receives the offsetting debit or credit. Thus, a closing entry simply transfers the balance of one account to another account. Because closing journal entries bring temporary account balances to zero, the temporary accounts are ready to start accumulating data for the next accounting period.

Question 13

The following entry closes the Depreciation Expense account at the end of the accounting period:

Accepted Answer

The closing process entry to close an expense account is to credit the expense account for the amount equal to its current debit balance and to debit the Income Summary account.

Question 14

Which of the following accounts is closed to Income Summary at the end of the accounting period?

Accepted Answer

The closing process includes entries to close expense accounts by crediting the expense accounts for the amount equal to their current debit balance and debiting the Income Summary account.

Question 15

Which of the following entries could not be a closing entry?

Accepted Answer

The closing process includes entries to close revenue and expense accounts to the income summary and to close the Income Summary account and the Dividends account to the Retained Earnings account.

Question 16

The Income Summary account:

Accepted Answer

The Income Summary account is closed prior to preparing the post-closing trial balance; it does not reflect the net balance of dividends (only income and expense accounts), and it is closed by a credit (not a debit) entry when there is a loss for the period.

Question 17

In the closing process for a corporation, the Income Summary account is closed to:

Accepted Answer

The Income Summary account is closed with a credit to the Retained Earnings account in the case of net income and with a debit in the case of a net loss.

Question 18

Koontz & Sons Company, Inc., has a net income for the current year. The entry to close the company's Income Summary account would be:

Accepted Answer

Since the company has net income for the current year, the Income Summary account has a credit balance prior to closing. Thus, the entry to close the Income Summary account is a debit to Income Summary and a credit to Retained Earnings.

Question 19

Which of the following entries is a closing entry?

Accepted Answer

The closing process includes entries to close revenue and expense accounts to the income summary and to close the Income Summary account and the Dividends account to the Retained Earnings account. Balance sheet accounts (wages payable, fees receivable, accumulated depreciation) are permanent accounts and are not closed.

Question 20

Which of the following entries is a closing entry?

Accepted Answer

The closing process includes entries to close revenue and expense accounts to the income summary and to close the Income Summary account and the Dividends account to the Retained Earnings account. Balance sheet accounts (wages payable, fees receivable, accumulated depreciation) are permanent accounts and are not closed.

Quiz 3: Accrual Basis of Accounting

On April 1, 2019, Exceed Technologies paid $240,000 for rent on warehouse space one year in advance. If Above and Beyond makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 income statement for rent expense?

On April 1, 2019, Gilgen & Sons paid $60,000 for rent on warehouse space one year in advance. If Gilgen & Sons makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 balance sheet as prepaid rent?

On April 1, 2019, Cooper paid $180,000 for rent on warehouse space one year in advance. If Justin makes the appropriate adjusting entry, how much will be reported on the December 31, 2019 balance sheet as prepaid rent?

Bee Corporation has the following normal account balances in its general ledger at the end of a period: Which of the following gives the correct entry required to close only the accounts above?

Sage Corporation has the following normal account balances in its general ledger at the end of a period: Which of the following gives the correct entry required to close only the accounts above?

A series of journal entries at the end of the accounting period to remove the balances from the temporary accounts so that they can accumulate data for the following accounting period are called:

The following entry closes the Depreciation Expense account at the end of the accounting period:

Which of the following accounts is closed to Income Summary at the end of the accounting period?

Which of the following entries could not be a closing entry?

The Income Summary account:

In the closing process for a corporation, the Income Summary account is closed to:

Koontz & Sons Company, Inc., has a net income for the current year. The entry to close the company's Income Summary account would be:

Which of the following entries is a closing entry?

Which of the following entries is a closing entry?