Question 1

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.  The entry required to close the expense accounts at the end of the period includes a:

Accepted Answer

The answer of Bob Evans owns a business, Beachside Realty,...

Question 2

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 3

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 decrease a liability account because the company has earned part of the revenue by providing services or goods over the year, thus reducing the liability and recognizing the revenue earned.

Question 4

Which of the accounts below would not appear in the balance sheet columns of the worksheet?

Accepted Answer

Rent Earned is a revenue account and would not appear in the balance sheet columns, which are used to list assets, liabilities, and owner's equity accounts.

Question 5

The balances for the accounts listed below appear in the Adjusted Trial balance columns of the end-of-period spreadsheet (work sheet). Indicate whether each balance should be extended to an Income Statement column or (b) a Balance Sheet column.
1. Dobson, Capital
2. Dobson, Drawing
3. Depreciation Expense
4. Accumulated Depreciation
5. Fees earned
6. Unearned Fees
7. Supplies
8. Supplies Expense

Accepted Answer

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

Question 6

Which of the items below does not appear on the work sheet?

Accepted Answer

Closing entries do not appear on the worksheet; they are journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.

Question 7

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 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 8

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

Accepted Answer

The work sheet is not an essential part of the accounting records. It is a tool used by accountants to aid in the preparation of financial statements and is not a permanent record kept for accounting purposes. The journal, ledger, and chart of accounts are all necessary components of accounting records.

Question 9

Describe a classified balance sheet.

Accepted Answer

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

Question 10

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.  The entry required to close the revenue accounts at the end of the period includes a:

Accepted Answer

The answer of Bob Evans owns a business, Beachside Realty,...

Question 11

The following accounts appear in an adjusted trial balance of Brock Pool Service Company. Indicate whether each account would be reported in the (a) current assets, (b) property, plant, and equipment, (c) current liabilities, (d) long-term liabilities, or (e) owner's equity section of the December 31, 2010, balance sheet of Brock Pool Service Company.

Accepted Answer

The answer of The following accounts appear in an adjusted...

Question 12

The income statement columns in the worksheet show that debits are equal to $55,800 and credits are $67,520. What does this information mean to the accountant?

Accepted Answer

The difference between credits and debits in the income statement columns indicates a net income. Since credits ($67,520) exceed debits ($55,800) by $11,720, it reflects a net income of $11,720.

Question 13

Morgan Olsen owns and operates Crystal Pool Service Company. On January 1, 2014, Morgan Olsen, Capital had a balance of $252,000. During the year Morgan invested an additional $32,000 and withdrew $52,400. For the year ended December 31, 2014 Crystal Pool Service Company reported a net income of $73,200. Prepare a Statement of Owner's Equity for the year ended December 31, 2014.

Accepted Answer

The answer of Morgan Olsen owns and operates Crystal Pool...

Question 14

Which of the accounts below would appear in the Balance Sheet columns of the work sheet?

Accepted Answer

Prepaid Rent is an asset account, which would appear in the Balance Sheet columns of the work sheet. Service Revenue and Supplies Expense are both income statement accounts and would appear in the Income Statement columns of the work sheet. Therefore, Choice A and C are incorrect. Choice D is incorrect because at least one option is correct.

Question 15

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 debit and credit totals ($41,101 - $37,686 = $3,415) indicates that the company has a net loss of $3,415 for the period.

Question 16

An indication that the work sheet columns are in balance and the work sheet is completed is

Accepted Answer

Double underlining is a common accounting practice to indicate that the totals of the columns are final and balanced.

Question 17

Which of the items below would appear in the Income Statement columns of the work sheet?

Accepted Answer

Only Net Loss would appear in the Income Statement columns of the work sheet, as it represents the expense incurred during the accounting period. Equipment, Unearned Fees, and Prepaid Expense are all balance sheet accounts and their balances would be shown in the Balance Sheet columns of the work sheet.

Question 18

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 $38,755 and $32,735, respectively. What is the amount of net income or net loss for the period?

Accepted Answer

The net income is the difference between the total debits and the total credits. In this case, the total debits are $38,755 and the total credits are $32,735. Therefore, the net income is $38,755 - $32,735 = $6,020.

Question 19

The work sheet at the end of July has $5,950 in the Balance Sheet credit column for Accumulated Depreciation. The work sheet 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 difference in the Accumulated Depreciation balance between July and August should represent the depreciation expense for the month of August. Therefore:
$7,600 (August balance) - $5,950 (July balance) = $1,650
So the amount of the depreciation expense adjustment for the month of August was $1,650, which is option D.

Question 20

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 net income is the difference between the total credits and the total debits. In this case, the total credits are $83,900 and the total debits are $77,500, so the net income is $83,900 - $77,500 = $6,400.

Quiz 4: Completing the Accounting Cycle

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014. The entry required to close the expense accounts at the end of the period includes a: