Question 1

On September 1,the company pays rent for twelve months in advance and debits an asset account.At year end,the adjusting entry on the work sheet would

Accepted Answer

The adjusting entry would increase the Rent Expense account and decrease the Prepaid Rent asset account. This is because, at the start of the year, the company paid rent in advance, so it was recorded as an asset on the balance sheet. However, by the end of the year, a portion of that rent has expired and needs to be recognized as an expense. Therefore, the adjusting entry would increase an expense account (Rent Expense).

Question 2

You have just accepted your first job out of college,which requires you to evaluate loan requests at Eastwood National Bank.The first loan request you receive is from Richard Enterprises.Richard Tracy,the CEO,is requesting $105,000 and brings you the following trial balance or statement of accounts for the first year of operations ended December 31.
What three accounts do you think should be relabeled for greater clarity?

Accepted Answer

The answer of You have just accepted your first job...

Question 3

After all of the account balances have been extended to the Balance Sheet columns of the work sheet,the totals of the debit and credit columns are $36,755 and $32,735,respectively.What is the amount of net income or net loss for the period?

Accepted Answer

The net income or net loss is determined by the difference between the debit and credit columns. Since the debit total is higher than the credit total by $4,020, it indicates a net income of $4,020.

Question 4

After all of the account balances have been extended to the Income Statement columns of the work sheet,the totals of the debit and credit columns are $77,500 and $83,900,respectively.What is the amount of the net income or net loss for the period?

Accepted Answer

The answer of After all of the account balances have...

Question 5

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet.Indicate whether each balance should be extended to a the Income Statement columns or b the Balance Sheet columns.

Accepted Answer

The answer of The balances for the accounts listed below...

Question 6

Which of the items below does not appear on the end-of-period spreadsheet?

Accepted Answer

Closing entries are not included on the end-of-period spreadsheet. The spreadsheet typically includes the unadjusted trial balance, adjusting entries, and the adjusted trial balance, but closing entries are part of the process to prepare the accounts for the next period and are not included on the spreadsheet.

Question 7

On January 1,Hannah's Pool Service Company had a retained earnings balance of $252,000.During the year Hannah's stockholders bought an additional $32,000 in common stock and received dividends of $52,200.For the year ended December 31 Hannah's Pool Service Company reported a net income of $73,200.Prepare a statement of retained earnings for the year ended December 31.

Accepted Answer

The answer of On January 1,Hannah's Pool Service Company had...

Question 8

After all of the account balances have been extended to the Balance Sheet columns of the work sheet,the totals of the debit and credit columns show debits of $37,686 and the credits of $41,101.This indicates that

Accepted Answer

The difference between the credits and debits is $3,415, which represents a net loss for the period. Therefore, choice B is correct. Choices A and C are incorrect because the net income or loss can be calculated from the totals of the Balance Sheet columns. Choice D is incorrect because the amounts are not out of balance, but rather represent the net loss for the period.

Question 9

The following balance sheet contains errors.
 $  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$\text { Mark Brock Services Co. }$
$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$\text { Balance Sheet }$
$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$  \quad $$\text { For the Year Ended December } 31$

$\begin{array}{l}
\hline \begin{array}{lll}
 \underline {\text { Assets }}\
\text { Current assets: }\
\text { Cash } & \$ 7,170 \
\text { Accounts payable } & 7,500 \
\text { Supplies } & 2,590 \
\text { Prepaid insurance } & 800 \
\text { Land } & \underline { 24,000} \
\text { Total current assets }&& \$ 42,060
\end{array}
 \quad \quad \quad \quad
\begin{array}{lll}
  \underline {\text { Liabilities }}\
\text { Current liabilities: }\
\text { Accounts receivable } & \$ 10,000 \
\text { Accum. depr.-building } & 12,525 \
\text { Accum. depr.-equipment } & 7,340 \
\text { Net income } &  \underline {11,500 }\
\
\text { Total liabilities }&&\$ 41,365
\end{array}
\end{array}$

$\begin{array}{l}
\begin{array}{lll}
\
 \text { Property, plant, and    } \
 \text {    equipment:  } \
 \text {  Building}& \$ 43,700 \
 \text {Equipment} & \underline {29,250} \
 \text { Total property, plant,    } \
 \text {and equipment } && \underline {72,950} \
\
 \text {Total assets } && \underline { \$ 131,510   } \
\end{array}
 \quad  \quad  \quad  \quad 
\begin{array}{lll}
\underline {\text { Stockholders' Equity }} \
\text { Wages payable } & \$ 1,500 \
\text { Common stock } & 86,645 \
\text { Retained Earnings } &\underline { 2,000}\
\
 \text {   Total stockholders' equity  } &\underline {90,145 }\
 \text {Total liabilities and } \
 \text { stockholders' equity   } &\underline { \$ 131,510}\
\end{array}
\end{array}$
 a List the errors in the balance sheet above and b prepare a corrected balance sheet.

Accepted Answer

The answer of The following balance sheet contains errors.
 \(...

Question 10

Daniel Corporation's end-of-period spreadsheet at the end of July has $4,950 in the Balance Sheet Credit column for Accumulated Depreciation.The end-of-period spreadsheet at the end of August has $7,600 in the Balance Sheet Credit column for Accumulated Depreciation.What was the amount of the depreciation expense adjustment for the month of August?

Accepted Answer

The depreciation expense adjustment for August is the difference between the accumulated depreciation at the end of August and July, which is $7,600 - $4,950 = $2,650.

Question 11

On March 1,a company collects revenue in advance for the next twelve months and credits a liability account.The adjusting entry at year end on the work sheet would

Accepted Answer

The adjusting entry at year end would be to recognize that a portion of the revenue collected in advance now belongs to the current year. This means that the liability account will decrease as the revenue earned for the current year is recognized and moved to a revenue account. Therefore, the correct choice is D, decrease a liability account.

Question 12

The end-of-period spreadsheet work sheet for the current year for Jamal Company shows Balance Sheet columns with a debit total of $614,210 and a credit total of $630,430.This is before the amount for net income or net loss has been included.In preparing the income statement from the work sheet,what is the amount of net income or net loss?

Accepted Answer

The answer of The end-of-period spreadsheet work sheet for the...

Question 13

You have just accepted your first job out of college,which requires you to evaluate loan requests at Eastwood National Bank.The first loan request you receive is from Richard Enterprises.Richard Tracy,the CEO,is requesting $105,000 and brings you the following trial balance or statement of accounts for the first year of operations ended December 31.
Which of the following accounts do you think might need to be adjusted before an accurate set of financial statements could be prepared?

Accepted Answer

The answer of You have just accepted your first job...

Question 14

The income statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520.What does this information mean to the accountant?

Accepted Answer

The difference between credits and debits ($77,520 - $55,800) indicates a net income of $21,720.

Question 15

An indication that the end-of-period spreadsheet columns are in balance and the spreadsheet is complete is

Accepted Answer

The double rule under each pair of columns is a common convention that indicates the end-of-period spreadsheet columns are in balance and the spreadsheet is complete. The other options may also be present, but they do not signify balance and completeness in the same way.

Question 16

Which of these accounts would appear in the Balance Sheet columns of the end-of-period spreadsheet?

Accepted Answer

Prepaid Insurance is a current asset account that would appear in the Balance Sheet columns of the end-of-period spreadsheet. Consulting Revenue, Rent Expense, and Fees Earned are all income statement accounts that would appear in the Income Statement columns.

Question 17

Describe a classified balance sheet.

Accepted Answer

The answer of Describe a classified balance sheet....

Question 18

The end-of-period spreadsheet work sheet for the current year for Jamal Company shows Balance Sheet columns with a debit total of $630,430 and a credit total of $614,210.This is before the amount for net income or net loss has been included.In preparing the income statement from the end-of-period spreadsheet,what is the amount of net income or net loss?

Accepted Answer

The answer of The end-of-period spreadsheet work sheet for the...

Question 19

Which of the following is not an essential part of the accounting records?

Accepted Answer

While end-of-period spreadsheets may be necessary for certain accounting processes such as closing entries and financial statement preparation, they are not considered an essential part of the accounting records. The journal, ledger, and chart of accounts are all essential components of the accounting system as they are used to record, categorize, and summarize financial transactions.

Question 20

You evaluate loan requests as part of your job at Eastwood National Bank.One loan request you received is from Surfer Dude Supplies,a small company.Richard Tracy,the CEO,is requesting $105,000 and brings you a trial balance or statement of accounts for his first year of operations ended December 31.
While you are willing to work with Richard,how would you explain to him that a complete set of financial statements from his accountant would be more useful for evaluating the loan request?

Accepted Answer

The answer of You evaluate loan requests as part of...

Quiz 4: Completing the Accounting Cycle

On September 1,the company pays rent for twelve months in advance and debits an asset account.At year end,the adjusting entry on the work sheet would

After all of the account balances have been extended to the Balance Sheet columns of the work sheet,the totals of the debit and credit columns are $36,755 and $32,735,respectively.What is the amount of net income or net loss for the period?

After all of the account balances have been extended to the Income Statement columns of the work sheet,the totals of the debit and credit columns are $77,500 and $83,900,respectively.What is the amount of the net income or net loss for the period?

The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet.Indicate whether each balance should be extended to a the Income Statement columns or b the Balance Sheet columns.

Which of the items below does not appear on the end-of-period spreadsheet?

After all of the account balances have been extended to the Balance Sheet columns of the work sheet,the totals of the debit and credit columns show debits of $37,686 and the credits of $41,101.This indicates that

On March 1,a company collects revenue in advance for the next twelve months and credits a liability account.The adjusting entry at year end on the work sheet would

The income statement columns in the end-of-period spreadsheet show that debits are equal to $55,800 and credits are $77,520.What does this information mean to the accountant?

An indication that the end-of-period spreadsheet columns are in balance and the spreadsheet is complete is

Which of these accounts would appear in the Balance Sheet columns of the end-of-period spreadsheet?

Describe a classified balance sheet.

Which of the following is not an essential part of the accounting records?